Before 2013, Netflix (NASDAQ:NFLX) had never made an appearance at the Emmy Awards show.

Fast forward five years.

Heading into the 2018 Emmy Awards show, Netflix has 112 Emmy nominations, making it the most nominated content producer heading into the event, slightly ahead of long-time Emmy king HBO (108 nominations).

What has happened over the past five years that has caused Netflix to go from zero Emmy nominations to 100-plus Emmy nominations? Netflix original content, that’s what happened. House of Cards. Stranger Things. The Crown. Bloodline. Mindhunter. Orange Is The New Black. Master of None. Grace and Frankie. GLOW. Black Mirror.

All of those shows happened. And Netflix original content became some the most widely watched and celebrated content in the world.

This transition has huge implications for NFLX stock. Back in 2012, before Netflix had any Emmy nominations, NFLX stock was trading below $10. Now, NFLX stock is above $400.

It isn’t random that this massive run higher has coincided with the Netflix original content portfolio going from zero Emmy nominations to more than 100 Emmy nominations.

Here’s a deeper look.

Netflix Original Content Is Really Good

It is tough to argue with the Emmy nominations. Over the past five years, Netflix original content has become not only quite good, but also quite diverse, appealing to a wide range of audiences.

Love dramas? House of Cards, Orange Is The New Black, The Crown, and Stranger Things have all received Emmy nominations for Outstanding Drama Series over the past five years.

Is comedy more of your thing? In addition to Orange Is The New Black, Unbreakable Kimmy Schmidt and Master of None have received Emmy nominations for Outstanding Comedy Series over the past five years.

Or are you more into long-form content? Black Mirror: San Junipero  won the 2017 Emmy for Outstanding Television Movie.

Big picture: regardless of what you’re into, Netflix has it. And they don’t just have it, they have a quality version of it.

Netflix Original Content Is the Fuel of Netflix Stock

This is big because Netflix original content is the very thing that powers Netflix stock higher.

There are two things I think make this point.

First, the current massive run in Netflix stock which has seen the stock smash through the $100, $200, $300 and $400 marks all started two summers ago. The catalyst? Stranger Things. Before then, bears were in control and NFLX stock was trading sideways on concerns that big content spend wouldn’t yield positive return.

The huge success of Stranger Things was the first big piece of evidence that those bears were wrong. Subscriber growth jumped in the summer 2016 quarter and smashed estimates. Ever since, Netflix has continued to produce quality original content, which has powered outsized subscriber growth — and NFLX stock hasn’t looked back.

Second, Netflix’s massive quarters seem to line up with a really strong original content lineup. That isn’t a coincidence. A really strong original content lineup increases awareness of the Netflix platform, convinces interested potential subscribers to sign up, turns trial versions into paid subscriptions and powers the whole growth machine.

Thus, so long as there are potential buyers in the market, a strong Netflix original content portfolio will be the fuel which powers subscriber growth and NFLX stock higher.

A Few Words of Caution on Netflix Stock

Despite the super-strong secular growth narrative, I would like offer a few words of caution when it comes to NFLX stock.

These words of caution revolve around valuation. It is just tough to see NFLX stock heading much higher considering it is already trading at a big multiple to earnings that are many years out.

Granted, there is a pathway for NFLX stock to hit $800 in 4-5 years. Thanks mostly to international growth potential, the company could get to somewhere around 350 million subs in 5 years. All those subs could be paying around $15 per month, and operating margins could trend towards 30%. Under those modeling assumptions, Netflix could net around $32 in earnings per share in 5 years. A 25 forward multiple on that implies a four-year forward price target of $800.

But that pathway lacks clarity due to competition. Disney (NYSE:DIS), AT&T (NYSE:T), Google (NASDAQ:GOOG), Facebook (NASDAQ:FB) and others are really stepping up their investment in the streaming world. Inevitably, that will create big competitive headwinds for Netflix, the sum of which should slow growth and weigh on the current valuation.

Bottom Line on NFLX Stock

Netflix original content is the big driver of this stock’s big run. Going forward, that catalyst will remain strong. But, competition will weigh on the currently big valuation, and gains going forward will be tougher to come by.

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