Shares of Netflix Inc. (NASDAQ:NFLX) surged to 52-week highs Tuesday, even as coronavirus fears triggered a broad slump in major equity indexes.
The video-streaming company is still benefiting from a better than expected quarterly earnings report that saw its total subscriber base grow to 167 million.
Netflix’s stock price peaked at $389.40 for a gain of 2.4%. The stock would eventually settle up 1.9% at $387.78, its highest level since June 2018.
The rally pushed Netflix’s market cap north of $170 billion where it ranks 33rd among active U.S. corporations .
Year-to-date, Netflix’s share price is up more than 18%.
The broader U.S. stock market declined sharply on Tuesday, as investors returned from an extended holiday weekend only to mull the latest developments around coronavirus. The large-cap S&P 500 Index declined 0.3%. Meanwhile, the Dow Jones Industrial Average plunged 165 points.
Stocks were under pressure over fears that China’s coronavirus epidemic would continue to spread. U.S. investment bank Raymond James Financial compared China’s handling of the coronavirus outbreak to the Soviet Union’s response to the Chernobyl nuclear disaster .
Heightened competition in the online video-streaming industry has put a dark cloud over Netflix’s growth prospects. It took Disney+ two months to add nearly 29 million subscribers , a feat that took Netflix years to achieve. (To be fair to Netflix, the video-streaming market was much smaller and far less developed when it launched more than a decade ago.)
Netflix managed to silence the naysayers in its latest quarterly earnings report, where it exceeded its previous guidance on subscriber growth. The company added more than 9 million subscribers for the quarter ending December. The vast majority of that growth came from international markets.
As Forbes recently highlighted , Netflix managed to grow its revenue by 128% between 2016 and 2019. While that pace will be difficult to maintain, its international streaming market shows no signs of slowing.
Analysts’ ratings of NFLX remain favorable, though the consensus suggests the stock has already exceeded its 12-month target. According to data compiled by Nasdaq , Netflix’s average 12-month price target is $380.23 based on 14 ratings.