What happened

Shares of Netflix (NASDAQ:NFLX) rose 39.4% in 2018, according to data from S&P Global Market Intelligence. It was a roller-coaster year in which the streaming video veteran's shares started out at $216, surged all the way to $423 in the early summer, then backed down to $240 by mid-December.

Check out the latest Netflix earnings call transcript.

So what

The company largely delivered on its promises throughout the year, except for some disappointing subscriber-addition results in the second quarter. That miss, which may have been the result of management underestimating the impact of the soccer World Cup on its subscriber trends, sent share prices tumbling for several months. A strong third-quarter report was unable to break the fall because the streaming video market was suddenly crawling with fresh competition in every corner.

A young couple share a bucket of popcorn on the couch, staring at the TV screen in wide-eyed excitement.

Image source: Getty Images.

Now what

Here we stand, a few days before Netflix's fourth-quarter report on Jan. 17. Share prices have now gained 59% over the last 52 weeks and 27% in the last month alone, as analysts and investors largely expect the company to provide another blowout report for the holiday quarter. The stock now trades at 117 times trailing earnings and 10 times sales, putting us investors firmly in the nosebleed section of Wall Street. So Netflix has a lot to prove on Thursday, but it's still one of the most attractive buys in the market today.