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Volatility is no stranger to Netflix (NASDAQ:NFLX) investors. Netflix stock was the S&P 500's biggest gainer last year, and it was on its way to beating the market in 2014 until last month's poorly received quarterly report

That can still happen. Netflix has started building momentum since trading as low as $331 the day after reporting its third quarter results. Let's go over a few of the reasons why the leading premium video service could be a bargain these days.

1. Netflix has been growing faster than its share price in 2014
Netflix shares have climbed 16% since bottoming out last month, but the stock still begins the new trading week with a mere 4.3% gain year-to-date. That's an opportunity. 

It's true that analysts have been whittling away at Netflix profit projections since last month's report. Bottom-line estimates for the current quarter, 2014, and even 2015 have all been coming down in light of a slowdown in Netflix's subscriber growth. 

It's not as gloomy as you might think. Analysts still see profitability growing dramatically in the coming years as it makes the most of its scalable model. We saw that even during the third quarter where a 27% year-over-year increase in revenue resulted in an 86% surge in net income. If this is the Netflix machine now, one can only imagine what will happen when its international operations are profitable on an overall basis and add instead of subtract from its bottom-line performance.

Bears will point out that Netflix is expensive, fetching more than 200 times last year's earnings, more than 100 times this year's profit, and even a lofty 80 times next year's target. However, those same pros see profitability soaring nearly fivefold in four years. Wall Street pros see Netflix earning $17.11 a share come 2018 according to Capital IQ. It may seem like a stretch to pitch Netflix as a great buy here at 22 times 2018's earnings, but also keep in mind that Netflix has beaten Wall Street's income models more often than not over the years. Last month's step back notwithstanding, history has shown that the safer bet is for Netflix to earn more than the pros are modeling. 

2. Netflix is still padding its lead
The big hullabaloo surrounding Netflix only closing out the quarter with 53.06 million streaming subscribers worldwide is that it was forecasting 53.74 million total streaming subscribers for the period just a few months earlier. Netflix points to consumers reacting to its springtime pricing increase as the culprit, suggesting that the initial magnetic appeal of the second season of Orange Is the New Black masked its pricing elasticity.

This is problematic, but we're still talking about a company that closed out the quarter with 3 million more subs than it had just three months earlier. Was there another service closing the gap? Was there another premium service tacking on as many net new subs? 

Amazon.com (NASDAQ:AMZN) is Netflix's closest rival in the realm of stand-alone streaming smorgasbords, but the leading online retailer has been hesitant to detail the success or lack thereof of its Prime Instant Video platform. We know the catalog is growing, including proprietary content. We know that Amazon is coming up with new gadgetry and alliances to make it easier to stream its offerings. However, it's highly unlikely that there are 3 million more Prime Instant Video viewers than there were three months ago and it's far even more unlikely that they are as engaged as Netflix subs.

3. The competition isn't as scary as you think
It was bad timing for Netflix to disappoint last month. The report came just as Time Warner's (NYSE:TWX) HBO was turning heads by announcing that it would roll out an over-the-top streaming service in 2015. In a nutshell, we're talking HBO Go without the need to have a cable or satellite television provider plan.

If subscriber growth is slowing now, just imagine the deceleration when you can cut the cord and still watch Game of Thrones without having to borrow your friend's HBO Go password? The one thing missing from this game-changing dynamic is that Netflix won't necessarily be the one to suffer. If anything, Netflix will benefit from more people cutting the cord as HBO, sports, and other purveyors of content cut out the bundle-happy middlemen.

Netflix will have the clear path as the leading platform. No one else has the audience to justify the $8.9 billion that Netflix has lined up in streaming content obligations. Even at $8.99 a month it will likely be half as expensive as whatever HBO decides to charge next year with just a sliver of the content library. There are more than 100 million people paying for cable or satellite television in this country, but letting that go will free them up to spend on more than just a single streaming service. HBO may be more friend than foe if it speeds up the cord-cutting process, and Netflix will once again be in the right place at the right time.   

Rick Munarriz owns shares of Netflix. The Motley Fool recommends Amazon.com and Netflix. The Motley Fool owns shares of Amazon.com and 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.