Markets have had a less than stellar first two months of 2018, but you would never guess that by looking at Netflix, Inc. (NASDAQ:NFLX). Netflix stock has been strong all year.

So far in 2018, the S&P 500 is up just over a percent. Same with the Dow Jones Industrials. The NASDAQ-100 has fared better, up nearly 7%. But Netflix stock? Its up 53% year-to-date.

And before you attribute that to, “Oh, its just typical strength in the big tech, FAANNG group”, take a look at the numbers.

Facebook Inc (NASDAQ:FB) is up less than a percent this year. Alphabet Inc (NASDAQ:GOOG) is up just 5%. Apple Inc (NASDAQ:AAPL) is near all-time highs, but still up only 5% on the year. NVIDIA Coproration (NASDAQ:NVDA) is up 20%, which is good, but still 30 points shy of Netflix’s run.

And even Wall Street’s all-time favorite, Amazon.com, Inc. (NASDAQ:AMZN), is under-performing Netflix stock in 2018 (AMZN is up “just” 30%).

Clearly, investors think there is something special about Netflix stock.

Indeed, they are right. Cord-cutting isn’t going anywhere. Over-the-top TV viewership is only growing. And this isn’t just a domestic trend. It’s an international one, too. Plus, Netflix continues to launch hit original after hit original.

What’s there not to like?

Netflix Is Always One Step Ahead

When Netflix split apart its streaming business from its DVD business in 2011, everyone called them crazy. Users were angered because the net result was essentially a massive price hike. Members quit the platform in droves (the company lost 800,000 subs in a single quarter). NFLX stock tanked. Analysts turned dour.

We all know how that turned out. The DVD business essentially went the way of Blockbuster, while the streaming business became cable TV’s killer (perhaps not coincidentally, traditional pay-TV viewership peaked in the United States in 2012). Netflix management was right, and subsequently, NFLX stock soared from 2012 to 2015.

When Netflix started getting rid of a lot of its licensed content and began investing heavily into original content in 2015-16, investors and analysts freaked out. It looked as if Netflix was just throwing a bunch of money down a black hole. NFLX stock didn’t do much of anything for the better part of those two years.

But again, we all know how that played out. Original content has become not only the foundation of Netflix’s competitive moat, but also the foundation of the whole business, as well.

Every time you turn on Netflix these days, it seems like one out of every two shows is a Netflix original. Again, Netflix management was right, and subsequently, NFLX stock soared from 2016 to today.

So, if you look at Netflix’s past, you can see that Reed Hastings and company are always one step ahead.

Now, that same management team is taking Netflix and making a massive international push. Hastings recently said that Netflix’s next 100 million subscribers will come from India.

That makes a ton of sense. As Business Insider points out, this is a country with rapid growth in consumer spending, internet usage, and online video consumption. That is a perfect triumvirate for success for Netflix.

The bears will say that it is not going to happen for a variety of reasons, but they said the same about streaming in 2011 and original content in 2016. So such complaints fall largely on deaf ears.

At the end of the day, Netflix has proven that as long as it can produce quality original content at a compelling price point for consumers, its on-demand and multiple-screen convenience will win out. That is a global value prop that will ring as true in India as it does in the United States.

Bottom Line on NFLX Stock

Yes, it’s richly valued, but it’s really not that hard to imagine a higher price.

Look at analyst estimates. Analysts are looking 53% earnings growth in 2020 to $6.50 per share. Even a simple price-to-earnings/growth (PEG) ratio of 1 gets you to a 53-times forward multiple on $6.50 earnings. That combination gets you to a $350 stock by the end of 2019 with a low-ball PEG.

High-ball that PEG to 1.5, and you’re looking at an 80-times multiple and a $500 stock by the end of 2019.

Regardless, Netflix stock has tremendous upside in a long-term window, driven by global adoption of on-demand, over-the-top streaming services and subsequent profitability ramp in the international business.

As of this writing, Luke Lango was long NFLX, FB, GOOG, AAPL, and AMZN.