Profit Picture

Shares of Netflix (NFLX) reached a new high of 63 on Jan. 28. That gain—more than $12 in one day—came as the company announced it added 1 million customers in the fourth quarter. The movie subscription service also reported fourth-quarter earnings of 59 cents per share, topping the average estimate of 44 cents, and CEO Reed Hastings said Netflix is expected to continue to grow "rapidly and profitably" in 2010.

The news prompted a spate of upgrades from analysts. A report from JPMorgan (JPM) noted that the company will benefit from an improving U.S. economy and predicted the stock would climb to 70 by the end of 2010. But the long-term outlook for Netflix depends on how the shift to digital streaming affects the company, which was founded in 1977. In 2009's fourth quarter, 48% of its 12.3 million couch-surfing subscribers streamed video. Morgan Stanley analysts think shares could rise as high as 68. Online competitors Hulu and YouTube, as well as rivals with DVD kiosks, like Redbox, remain threats.