As the markets plummeted Tuesday, Netflix was a rare bright spot in a sea of red — the subscription movie service finished Nasdaq trading up almost 8 percent .
Netflix bucked the broader market thanks to an upgrade from Goldman Sachs, which raised its rating from 'buy' to 'neutral,' and lifted its price target to $300. That's still a good $50 more than where it's trading now.
Today's move is all the more striking considering that just last week Facebook became a rival to Netflix, by partnering with Warner Brothers to stream movies on its site. But Goldman points out that Facebook poses far more competition to video-on-demand services like Amazon's. When it comes to a subscription service, the barriers to entry are far higher.
Goldman analyst Ingrid Chung says she believes that the nearly 20 percent sell-off in recent months is an overreaction to signs of competition, especially considering that subscriber growth has been better than expected. She expects the company to add as many as 4 million subscribers *per quarter* to its 20 million subscriber base. Other reasons for optimism about Netflix: 27 percent of US consumers now stream movies or TV shows, up from 16 percent a year ago, and International prospects for Netflix are strong.