Market sentiment is rising on Netflix, Inc. (NASDAQ:NFLX) heading into Monday’s quarterly earnings report. Netflix stock has held up remarkably well amid increased market volatility, and Monday’s report should be a positive driver for the shares. For NFLX options traders, this is a bullish opportunity.

Netflix is expected to post a profit of 64-cents-per-share on Monday, up 60% year-over-year. Revenue is expected to rise nearly 40% year-over-year to $3.69 billion. Those are some impressive gains, and analysts are taking note.

In the past week, the brokerage community has gotten out ahead of Netflix’s first-quarter report. Cowen & Co. lifted their price target of Netflix stock to $325 from $275. Analysts at Cowen cited an “extensive” slate of content and worse-than-expected ratings for the Winter Olympics.

Additionally, Goldman Sachs also weighed in, lifting its price target to $360 from $315. In a note to clients, Goldman said they “continue to believe long term subscriber growth and profitability will exceed current consensus expectations.”

Subscriber gains are the real key to Netflix’s quarterly report on Monday, and the company’s financial longevity. In fact, Moody’s Financial Services lifted its debt rating on Netflix stock based on strong continued subscriber growth. Moody’s now sees Netflix having positive cash flow by 2022 due to the company’s pace of subscriber adds.

Despite this outpouring of bullish sentiment, there is still room for improvement. According to Thomson/First Call, only 25 of the 41 analysts following Netflix stock rate the shares a “buy” or better. What’s more, the 12-month price target rests at $286.62 — a discount to Netflix stock’s current trading range.

In short, there is plenty of room for both upgrades and price-target increases following Monday’s report.

Click to EnlargeTechnically speaking, Netflix stock is up a whopping 58% so far in 2018 — putting the rest of the market and its peers in the FAANG group to shame. Despite those gains, NFLX is far from overbought.

After rebounding from support near $270, NFLX has reclaimed both its 50-day and 20-day moving averages. The shares are currently perched on the latter and are looking to rally higher, market and Trump tweets willing.

Turning to the options pits, April implieds for NFLX options are pricing in a potential post-earnings move of about 10.5% for Netflix stock. This places the upper bound at $335, while the lower bound lies at $270.

Two Trades for Netflix Stock

Call Spread: For those looking to follow the bullish trend in the brokerage community and bet on a breakout for Netflix stock, an April $320/$325 bull call spread has potential. At last check, this spread was offered at $1.64, or $164-per-pair of contracts. Breakeven rests at $321.64, while a maximum profit of $3.36, or $336-per-pair of contracts — a potential return of 100% — is possible if NFLX stock closes at or above $325 when April options expire at the end of next week.

Put Sell:  Alternately, if market volatility or an ill-timed Trump tweet worries you, an April $250 put sell has a high probability of finishing out of the money. At last check, this put was bid at $1.40, or $140-per-contract. As usual with a put sell, you keep the premium as long as Netflix stock closes above $2,500 when April options expire. On the downside, if NFLX trades below $250 prior to expiration, you could be assigned 100 shares for each put sold at a cost of $250-per-share.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.