What happened

Netflix (NFLX 2.47%) shares surged on Tuesday thanks to a rosy analyst report. The video-streaming giant's stock rose as much as 5.3% before retreating to a 5% gain at 3:30 p.m., EDT.

So what

Mark Mahaney, a financial analyst at the Royal Bank of Canada (RBC), raised his price target on Netflix from $530 to $610 a share and reaffirmed his "outperform" rating on the stock. Mahaney expects Netflix to beat the broader market because it has "achieved a level of sustainable scale, growth, and profitability that isn't currently reflected in its stock price

A hand draws a red charting arrow pointing upward over a chalkboard drawing of the Earth.

Image source: Getty Images.

Now what

Netflix is a global growth story. The RBC analyst sees Netflix grabbing a 57% market share among fixed broadband households on a worldwide level, not counting China. The company's share of the addressable market stops at 29% today. The market itself is sure to grow as more and more households gain access to broadband services, and reliable banking options in both developed and emerging countries. Mahaney's analysis suggests that Netflix could grow its user base from 193 million accounts today to 500 million subscribers in 2030.

Netflix's stock has now gained 64% in 2020 and 80% over the last 52 weeks. It also looks overvalued when measured by traditional metrics, such as price to earnings or price to sales, but what else is new? Mahaney's report makes a ton of sense, and Netflix's skyrocketing stock appears to have lots of rocket fuel left in its tank.