Netflix (NASDAQ:NFLX) stock has been getting some love since last Tuesday, when the company reported its third-quarter results. Shares have risen 6.5% and many analysts have been raising their 12-month price targets for the stock. While not all analysts are bullish on Netflix following its third-quarter update last week, a whopping 10-plus analysts hiked their price targets for shares. Netflix is clearly doing something right.

Are the Netflix bulls right? Do shares of the streaming-TV giant remain a good opportunity even as they trade at all-time highs?

A chalkboard of a bar chart with an arrow highlighting a growth trend.

Image source: Getty Images.

Important third-quarter takeaways

Netflix reported better-than-expected net new member additions in Q3. The company added 4.4 million new members. Analysts, on average, were expecting Netflix to add 3.8 million new members. This growth in members helped revenue increase 16% year over year to just under $7.5 billion and earnings per share climb from $1.74 in the year-ago period to $3.19.

Importantly, Netflix's average revenue per membership increased 7%, or 5% when excluding foreign-exchange impact. Investors want to see continual growth in average revenue per membership over the long haul, as it implies that Netflix continues to have pricing power. This pricing power is particularly important because the company doesn't make any money from advertising.

Beyond Netflix's strong financial results, management gave investors some insight into its testing of mobile games. While management didn't provide too much context about its gaming plans since it's still early in the process of testing, it did say that things are going well. "We've got a positive trajectory," said Netflix's chief product officer, Greg Peters, in the company's third-quarter earnings call about its initial efforts in gaming. The overarching goal with its gaming strategy, Peters implied, is to help boost user engagement.

Netflix stock: buy, sell, or hold?

Analysts were largely impressed with Netflix's subscriber trends, evident both by better-than-expected third-quarter subscriber additions and management's guidance for 8.5 million new members in the fourth quarter of 2021.

Does this inflection point in subscriber growth make Netflix stock a buy?

While Netflix's high price-to-earnings ratio of 60 may scare some investors away from the growth stock, the valuation is quite conservative with more context. Not only is Netflix's bottom line soaring as the company continues to benefit from improving operating margin, but the company's subscription-based business model gives investors a way to bet on video without being reliant on advertisements. While connected-TV ads are certainly a great growth opportunity, it may be helpful for some investors to own a subscription pure-play model as well, considering how many other businesses are dependent on digital advertising. Chances are, at least a few of many investors' investments rely on digital advertising. Netflix remains one of the best investments available to people looking to invest in a platform model that isn't reliant on digital ads, offering some diversification away from the alternative.

Netflix's powerful business model and its strong earnings momentum suggest bullish analysts may be right about the stock. Shares continue to look attractive -- even at 60 times earnings.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.