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Jim Cramer: Netflix stock goes higher

Could Netflix really climb to $500 a share? A growing number of Wall Street analysts certainly think so.

On Tuesday, Morgan Stanley upgraded the DVD rental and online video streaming service provider to "overweight" with a price target of $500 a share. Pacific Crest also has a $500 price target for an "outperform" rating.

CNBC's Jim Cramer.
Adam Jeffery | CNBC
CNBC's Jim Cramer.

"When you hear those things, obviously people get really excited. ... People just like it. The adoption is very strong," CNBC's Jim Cramer said on "Squawk on the Street."

Read MoreCramer: Understand risk in this market

Though Cramer typically likes stocks on an earnings-per-shares basis, he said Netflix is "not an earnings-per-share story." He noted the stock currently trades at roughly 100 times 2014 earnings, which assumes it will experience "rapid acceleration and rapid profit," making it attractive right now.

To Cramer, Netflix is a "cult stock" that can be valued not only on a takeover basis, but mainly on its rapid subscription growth around the world thanks to its shows like the hits "Orange Is the New Black" and "House of Cards."

"It's the animal-spirited stock of this moment. ... A lot of people like the programming, the success all over the world. It will go higher on this," Cramer said. "Do you trade it? Do you own it? I think this is one of those stocks where you have to accept the faith that they will continue to deliver on sign-ups and it goes higher."

Cramer added one caveat, though: Only buy the dips.

"You want to buy it when it's down. Not when it's flying."

—By CNBC's Drew Sandholm.

DISCLOSURE: When this story was published, Cramer's charitable trust did not own shares of Netflix.