Is It Too Late to Buy Netflix?

Shares of Netflixhit yet another all-time high on Wednesday. Two developments -- its first foray into Asia and a generous baby leave policy -- helped fuel renewed interest in one of the S&P 500's hottest stocks.

The Associated Press is reporting that Netflix will launch in Japan on Sep. 2. That isn't a surprise. The leading premium video service announced back in February that it would be expanding into Japan in the fall. However, a firm date -- along with deeper penetration into Europe -- is encouraging to hear given Netflix's success overseas.

It has tacked on 15.5 million streaming accounts worldwide during the past year to grow its global audience to 65.55 million, and 6 million of those came outside of the U.S. market. That baton of growth is being gradually passed to the international opportunities, and expanding into new countries should deliver results in the long run.

The other development -- offering unlimited maternity and paternity leave for employees -- is more than a little interesting. Netflix will also cover the full salary and benefits for the first year of that unlimited hiatus.

It remains to be seen what this will actually cost Netflix, but it did generate a lot of positive buzz for a company at a time when the public is clamoring for companies to offer higher wages and better benefits elsewhere. It probably will help more in improving consumer perception of the Netflix brand than it will cost in implementing that generous perk, and when you're a consumer-facing brand like Netflix, this could go a long way in attracting and retaining subscribers (to say nothing about fertile hires).

Netflix seems as if it can't do anything wrong these days. Shares of Netflix have soared 165% this year as of today's intraday high. It has also more than doubled since I argued that it's not too late to buy Netflix back in March. It wasn't, obviously. It doesn't seem as if it's too late now.

Too many investors have been burned by bailing on Netflix, arguing that it was peaking. It happened back in March, when an analyst downgrade prompted my column defending its then seemingly inflated share price. It happened back in June, whenCarl Icahn cashed outof the stock... and that was 30% ago.

Netflix was, and continues to be, expensive by most conventional measuring sticks, but then along comes another blowout report -- like we saw last month when the stock soared 18% the day after deliveringa monster second quarter-- and expectations get revisited.

It's not fair to value Netflix based on trailing earnings or cash flow because international expansion is weighing on results. It's not fair to value Netflix on revenue relative to other media distributors because it fails to account for the economies of scale in this unique space in which it operates. Until the blowout quarters stop coming, it will be hard to give up on Netflix.

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Rick Munarriz owns shares of Netflix. The Motley Fool recommends Netflix. The Motley Fool owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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