Of all the widely followed and top-performing FANG stocks, Netflix, Inc. (NASDAQ:NFLX) has reigned supreme in terms of share price performance.

Year-to-date, Netflix stock is up more than 70%. No other FANG stock is up more than 40%. Meanwhile, over the past year, Netflix stock is up more than 100%. No other FANG stock is up more than 65%.

In other words, NFLX stock has been the top-performer in a top-performing group.

There is good reason for that. Netflix is winning everywhere it counts, and in doing so, is marching towards world domination of the at-home entertainment industry. This march towards the mountain top of the entertainment industry is far from over. As such, the run in NFLX stock is also far from over.

Has Netflix stock come too far, too fast? Perhaps. The stock looks fairly valued here and now around $330. Valuation friction may cause choppy trade in the near-term.

But longer-term, the bear thesis looks way off. Netflix is in the early innings of a global growth narrative that has a ton of firepower through user growth and price hikes. All that firepower should make Netflix stock a huge winner over the next 5-10 years.

Here’s an in-depth look at 9 things that will drive Netflix stock higher over the next several years:

#1. A Bold Bet & A Big Payoff

Netflix was founded in 1997 as a DVD rental business. At that point in time, it was the era of Blockbuster. Consumers would run into a store, peruse titles for a few minutes, and then bring home a handful of DVD rentals. As such, an on-demand DVD rental service seemed to make sense in that era. Interestingly enough, Netflix actually wanted to be bought out by Blockbuster for about $50 million in 2000.

But then that whole industry was uprooted by technological advancements. Namely, streaming came along. Amazon.com, Inc. (NASDAQ:AMZN) launched Amazon Video in late 2006. A few months later, Netflix launched its own streaming service. By 2010, Blockbuster was bankrupt.

The writing was on the wall. Streaming was the future. But Netflix hadn’t fully adapted to that future. The company, after all, still bundled its DVD rental and streaming businesses together in the same plan.

That ended in 2011. CEO Reed Hastings announced that Netflix would be splitting apart its DVD and streaming businesses, resulting in a massive price hike for anyone that wanted to keep both services.

Consumers and investors hated the move at first. After all, Netflix essentially just hiked their prices by a whole bunch without really offering much more to the consumer. Netflix lost a whole bunch of subs, and Netflix stock plummeted.

To below $10.

But a year later, traditional cable television viewership in the U.S. peaked.

And now, 7 years later, Netflix has more than 50 million streaming subs in the U.S. and more than 120 million streaming subs globally. Meanwhile, Netflix stock has soared to above $300.

Clearly, Netflix’s big bet in 2011 has had a big payoff. Internet TV is far superior to linear TV in almost every way. Netflix is the king of the internet TV, so as consumers have realized internet TV’s superiority, Netflix adoption rates have soared.

The best part is that this big payoff is far from being fully realized. The Netflix growth story is still in its early innings, and that means explosive gains for Netflix stock are still in store over the coming quarters and years.

#2. Netflix’s Growth Is Actually Accelerating

In finance, and pretty much everywhere else, there is this thing called the law of large numbers. As it relates to finance, the idea is that as a company gets bigger, it gets harder to grow because the laps get bigger and the remaining portion of the market left to capture gets smaller. Consequently, the law of large numbers says that as a company grows, growth rates should naturally come down.

That isn’t happening at Netflix. Anywhere. U.S. subscriber growth is accelerating. International subscriber growth is accelerating. Revenue growth is accelerating.

Over the past 12 months, Netflix has added nearly 5.9 million U.S. streaming subscribers, representing roughly 11.5% growth year-over-year. In the prior 12 month period (2016-17), Netflix added 3.9 million U.S. streaming subs (+8.2% year-over-year). Therefore, not only is raw user growth accelerating, but percentage user growth is accelerating, as well.

This growth acceleration in U.S. subscriber numbers is especially impressive considering how many U.S. households already have Netflix. In the U.S., there are roughly 115 million internet households. Netflix had over 50 million subs 12 months ago. Thus, despite already capturing more than 40% of its addressable market in the U.S., Netflix’s U.S. user growth still accelerated over the past 12 months.

This acceleration is happening internationally, too.

Over the past 12 months, Netflix has added 20.4 million international streaming subscribers, representing roughly 42.6% growth year-over-year. In the prior 12 month period (2016-17), Netflix added just 13.4 million international streaming subs (+38.7% year-over-year). As was the case with U.S. sub growth, international sub growth is accelerating on both a raw and percentage basis.

Same story with revenue growth. Two years ago, revenue growth rates in the company’s consolidated streaming business were running below 30%. A year ago, revenue growth was just under 40%. Now, revenue growth is solidly above 40% and is expected to remain there next quarter, too.

Clearly, this is a company which continues to defy the law of large numbers, and that is a good thing. It means that Netflix has figured something out that is working in its favor to offset the fact that it is tougher to grow from a bigger base.

That “something” is that Netflix wins across the board on everything consumers care about, from price to convenience to content.

#3. Netflix Wins On Price

Perhaps the best thing about the Netflix streaming service, and the thing that consumers love the most, is how remarkably cheap the service is.

Netflix prices range from $7.99 per month to $13.99 per month. Even at the high end, that still seems remarkably cheap for a video streaming service with a seemingly unlimited content library.

By comparison, traditional cable packages cost around $100 per month, making it more than 7-times as expensive as even the priciest Netflix subscription. Thus, unless consumers see cable as offering significantly more value that Netflix, the price of cable just seems absurd next to the price of Netflix.

Even as far as subscription plans go, Netflix is pretty cheap.

Spotify and Apple Music offer unlimited music streaming for $9.99 per month. That is cheaper than Netflix, but it is also music, not streaming video and almost everyone would agree that video content is more valuable than audio content. Amazon Prime costs around $12.99 per month. Hulu runs between $8 and $15 per month. YouTube Red is about $10 per month.

In other words, current popular music/video streaming services run around $8 to $15 per month. Netflix falls within that price range. But many would argue that Netflix has much more and higher quality content than what is offered on any other music/video streaming service. Thus, Netflix seems to be the best value product on the market.

#4. Netflix Wins On Convenience

Netflix is a big winner when it comes to convenience.

Traditional cable packages come with a bunch of wires, bulky boxes, and lengthy set-up processes. Netflix is cord-free (everything is hosted in the cloud). There aren’t any bulky boxes (everything is streamed directly through a TV or other smart device). And the set-up process is very, very simple.

Plus, traditional cable has limited viewing. You can only really view traditional cable on TVs that are connected to a cable box.

Netflix has much more flexible viewing. You can view Netflix on any smart TV or any regular TV, so long as it has a streaming device (like Google Chromecast). You can also view Netflix on any smartphone, smart tablet or computer.

In this sense, Netflix’s hassle-free set-up and multiple-screen viewing capability make it significantly more convenient to set-up and use than traditional cable.

Moreover, Netflix is on-demand. Traditional cable feeds you programming at pre-selected times, so if you want to watch a particular show or movie, you have to adapt your schedule to accommodate those pre-selected times.

Netflix is the exact opposite. Netflix just gives you a content of library that is constantly updated, and allows you to select what you want to watch and when you want to watch it. Thus, Netflix’s “programming schedule”, much like its viewing experience, is flexible, and accommodates the consumer’s schedule.

Overall, it is really easy to see why Netflix wins on convenience. Netflix has a hassle-free, no-cords set-up process. The platform offers multiple-screen viewing capability. And everything is on-demand.

#5. Netflix Wins On Content

The price and convenience aspects of Netflix are meaningless unless the company is populating its streaming service with content of comparable popularity and quality to traditional cable and/or other streaming services.

Fortunately, Netflix is spending an arm and a leg to produce original content that is not only of comparable popularity and quality, but actually of arguably higher popularity and quality.

Best part about all that strong original content? It is diverse, so everyone from high school kids to grandma has a reason to watch Netflix.

Science fiction enthusiasts? Mystery movie lovers? That sub-set of Netflix subs fell in love with Stranger Things, which received an absurdly high 8.9 rating on IMDb.

On the romantic comedy side, Netflix originals Love and Lovesick are two rom coms that have both received high remarks from users and critics alike.

When it comes to teenage, coming-of-age dramas, there is no shortage of quality content on Netflix. Shows like Atypical, 13 Reasons Why and Everything Sucks are all highly rated teen dramas on Netflix.

Want something a little more off-beat? Try End of the F***ing World or I Don’t Feel at Home in This World Anymore.

Looking for pure comedy? Netflix has a ton of those movies and shows, too, including Santa Clarita Diet, Game Over, Man, The Do-Over and Kodachrome.

How about something more serious? Maybe try The Crown, Mindhunter, Ozark, Mudbound or Narcos. 

Into documentaries? Critics have raved about Making a Murderer and Evil Genius: The True Story of America’s Most Diabolical Bank Heist.

Clearly, there is something for everybody on Netflix. All of this content is exclusive to Netflix, and most of it is high quality (just check critic and user reviews). As such, almost everyone has a reason to subscribe to a Netflix account from a pure content perspective.

#6. Young People Love Netflix

Netflix wins on price, convenience and content. That trifecta of victories alone should guarantee Netflix domination of the at-home entertainment industry for years to come.

But Netflix also importantly wins where it counts most, and that is among young consumers.

According to Piper Jaffray’s Taking Stock With Teens Spring 2018 survey, Netflix is second to none when it comes to entertainment options for teenagers. Among video consumption platforms, Netflix has the highest mind-share with 39%, versus 30% for YouTube and 20% for cable TV. More importantly, Netflix’s mind-share grew 1 percentage point year-over-year, while cable’s fell 3 percentage points year-over-year.

Moreover, according to a survey of 1,500 teens conducted by Trendera, teens watch nearly twice as much Netflix as they do live TV. Another survey shows that nearly 80% of millennials (ages 22-37) think Netflix has the best original content of any streaming service.

Clearly, Netflix is winning over the young demographic.

That is very important. While they may be today’s broke and struggling-to-get-by consumers, they are tomorrow’s big spenders. Thus, if Netflix can maintain its leading popularity position among this important demographic, then it really is only a matter of time before Netflix, not cable TV, becomes the norm in at-home entertainment consumption.

Netflix should be able to maintain that leadership position. The company is pumping a ton of money into developing original content that is highly attractive to the younger demographic. Note the high concentration of teen-focused, coming-of-age dramas in Netflix’s original content library. Even the platform’s biggest science fiction and drama hits, like Stranger Things, 13 Reasons Why and 3%, all star young actors and actresses.

There is a reason for that.

Eventually, Netflix’s original content development strategy will shift. But for now, this strategy is convincing young people to fall in love with Netflix, a dynamic that ensures a bright tomorrow for the streaming platform.

#7. Netflix Could Hit 350 Million Global Subs Soon

Given the company’s currently accelerating growth trend and the fact that Netflix wins where it counts (in price, convenience, and content, and among young users), it really is only a matter of time before Netflix takes over the at-home entertainment world.

How big is this market for Netflix? Pretty big.

There are currently roughly 115 million internet households in the U.S. Around 57 million of those households subscribe to Netflix. And that number is growing by more than 10% per year. Thus, Netflix’s internet household penetration in the developed U.S. market is 50% and growing.

There really isn’t any reason that number won’t get to 60%, 70%, 80%, and up over the next several years. Netflix’s value prop is significantly better than traditional cable’s value prop. As such, it isn’t unlikely that Netflix becomes the norm in internet households. From this perspective, 100 million domestic Netflix subs is actually quite achievable in a 10-year window (that would imply greater than 80% share of internet households).

A jump from 60 million domestic subs today to 100 million domestic subs in 10 years is big growth for Netflix stock. But it’s rather anemic compared to what could happen on the international front.

There are 4.1 billion internet users in the world, and that number is only growing. Assuming a global average household size of 2.5, that equates to just over 1.6 billion internet households around the world. About 115 million of those households are from the U.S., and another roughly 310 million are from China (assuming household size of 2.5), a country that Netflix has long struggled to penetrate due to regulation.

Taking those out, that still leaves Netflix with an international addressable market of over 1.2 billion. Given that the global internet landscape isn’t as developed as the U.S. internet landscape, it is unlikely that Netflix international penetration rates ever rival domestic penetration rates. But considering U.S. penetration rates are already at 50%, it really isn’t that unlikely that in 10 years, Netflix has captured at least 20% of the international market.

That would imply at least 240 million international subs, and likely closer to 250 million. On top of 100 million domestic subs, Netflix could easily get to 350 million global subs in 10 years (versus 125 million today).

#8. Price Hikes Are A Big & Undervalued Growth Driver

Global subscriber growth is a big driver for Netflix stock over the next several years. But an equally big, yet largely underappreciated, growth driver for Netflix stock is the company’s ability to raise prices without subscriber churn.

As stated earlier, Netflix really is dirt cheap at less than $15 per month considering the enhanced convenience and quality the platform offers. You arguably get just as much quality content as cable with greater convenience, and yet it is a fraction of the price of cable.

Because of this, consumers would pay more for Netflix. According to a Piper Jaffray survey, roughly 64% of subscribers would pay up to $15 per month for Netflix, 23% would pay up to $20 per month, and 6% would pay more than $20 per month. Thus, the survey seems to point the fact that Netflix has clear runway to hike prices to around $15 per month over the next 5-10 years without much churn.

I think that is a low-ball target. When consumers are asked in a survey whether or not they would pay more for a service, the natural response is going to be no. After all, what incentive does someone have to say yes? Saying yes only leads to giving the company more reason to actually hike prices, something no consumer wants. Thus, the fact that 64% voluntarily said they would pay up to $15 per month is very bullish. In my mind, I read that as almost everyone would pay $15 per month if they had to.

After all, Netflix has hiked streaming prices 3 times in the past 4 years. And yet, no one has quit the platform. Instead, because Netflix still wins on price, convenience, and content, user growth has just picked up.

Netflix’s ability to raise prices is big for two reasons.

First, it obviously gives Netflix a huge revenue growth driver. Imagine Netflix at scale with 350 million global users. A price hike of just $1 per month would translate into $350 million in revenue per month, or $4.2 billion per year. A $2 per month price hike would translate into incremental revenues of $8.4 billion per year.

Those aren’t small numbers by any stretch.

Second, and perhaps more importantly, price hikes are hugely additive to margins. The more revenue per subscriber goes up, the wider the divergence between revenue per subscriber and cost per subscriber. The wider that divergence, the bigger the profit margins.

#9. Netflix Stock Has Long-Term Upside

Because of the big global growth narrative and price hike power, the math for Netflix stock heading materially isn’t all that hard to follow.

In 10 years, Netflix should have at least 350 million global subs. Conservatively, average price per month for Netflix should be at least $15 globally in 10 years. That combination leads to revenues in 10 years of $63 billion.

Operating margins are just 12% right now. But they are ramping up by 300-400 basis points per year as scale drives huge operating leverage. This trend will continue, and any price hikes down the road should add even more firepower to the margin growth narrative.

Conservatively, let’s say that margins grow by roughly 200 basis points per year over the next 10 years, implying 20 points of overall expansion. That would put operating margins at 32% in 10 years. On $63 billion in revenue, that would imply just under $20.2 billion in operating profits. After interest expense and taxes, that should flow through to around $31 in earnings per share in 10 years.

Facebook Inc (NASDAQ:FB) and Alphabet Inc (NASDAQ:GOOG), both later stage big-growth companies with relatively maxed out user growth but strong unit revenue growth trends, trade around 25-times forward earnings. Netflix in 10 years will likely look like Facebook and Google today. Thus, a 25-times forward multiple seems appropriate.

A 25-times forward multiple on $31 implies a nine-year forward price target of $775. Discounted back by 10% per year, that equates to a present value for Netflix stock of just under $330.

Bottom Line on NFLX Stock

NFLX stock may be maxed out in the near-term. But longer-term, this stock could easily more than double over the next 5-10 years as growth goes global and price hikes boost revenues and margins.

In the big picture, Netflix stock is a long-term winner.

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