Why Netflix Stock Popped on Monday

Earnings season is upon us, and up on Wall Street, analysts are placing bets for who will miss and who will beat earnings this quarter. The news on Netflix (NASDAQ: NFLX) is good.

This morning, three separate analysts -- Bank of America , MoffettNathanson, and Morgan Stanley -- all raised their price targets on the streaming TV provider . And as a result, Netflix stock is up a solid 2.3% through noon ET.

What Wall Street is saying about Netflix

Admittedly, only two of these price target hikes were propitious for Netflix. Moffett raised its price target , but only to $565, and only with a neutral rating, despite predicting faster subscriber growth as Netflix's crackdown on password sharing continues converting freeloaders to paying customers. BofA and Morgan Stanley were more enthusiastic.

Valuing Netflix stock at $740 and $780 a share, respectively (Netflix currently costs about $657 and change), these two bankers said Netflix has an "enviable market position" in the streaming space, which should help the company to grow sales and profit margins at least through 2025. BofA in particular forecast "several years" of good growth for Netflix.

Morgan Stanley even said it sees a path to Netflix hitting $950 a share by the end of 2025, if everything goes right in Thursday's earnings report, and the company's new advertising business takes off.

Is Netflix stock a buy?

I'm not sure I'd go quite that far, however. Forty-five percent growth in share price over the next 18 months seems a bit irrationally exuberant to me. At its current price, after all, Netflix already costs 45 times earnings, which is hardly cheap.

That being said, BofA rightly points out that Netflix is producing superior free cash flow , $7 billion over the past year, or about 9% more than reported net income. Valued on free cash flow , the stock's multiple drops to about 40x.

That's still a tad expensive. But with earnings growth projected at a healthy 28%, the dominant player in streaming entertainment looks almost cheap enough to buy.

Bank of America is an advertising partner of The Ascent, a Motley Fool company. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and Netflix. The Motley Fool has a disclosure policy .