Netflix stock surged Thursday on the strength of the home entertainment giant's bullish fourth-quarter earnings.
Shares of the company rose 22 percent over the course of trading, ending the day at $116.01 a share.
It's a welcome turnaround for Netflix. The company has endured subscriber outrage and defections since raising prices on its most popular subscription package last summer and attempting to spin-off its DVD-by-mail business into a separate company called Qwikster.
Netflix abandoned its Qwikster ambitions last winter, but that did nothing to bolster its plunging stock price, which was as high as $300 in July.
What a difference a quarterly earnings report can make.
Investors are looking more favorably on Netflix after the company said Wednesday that it has gained more than 600,000 subscribers in the fourth quarter — nearly replacing the roughly 800,000 members that left its rolls during the previous earnings period.
In addition, Netflix trounced Wall Street’s expectations for the period, reporting profits of $41 million or 73 cents per share, on $876 million in revenue. Analysts had projected earnings of 54 cents a share and $857 million in revenue.
"We are incrementally bullish on shares of Netflix following the 4Q results," Arvind Bhatia, an analyst with Sterne Agee, said in a note.
Netflix's recovery may be incremental, but it's better than a few months ago when it was nearly left for dead.