Source: Netflix

Netflix's (NASDAQ:NFLX) stock is truly on fire, trading near historical highs in the neighborhood of $615 per share and accumulating an impressive gain of almost 80% in the last year. This puts the company's market capitalization at a respectable $37 billion.

However, the analysts at Apex Capital believe that the market is still underestimating Netflix and its long-term potential, and they calculate that the online streaming giant could be worth as much as $100 billion. This would imply a big upside potential of nearly 170% from current levels.

These estimations always rely on all kinds of assumptions about the future, as such; they are necessarily subject to errors and revisions. Even the best investment professionals can make mistakes, so investors need to do their own homework as opposed to blindly following the recommendations of others. However, we can sometimes gain valuable insights when analyzing research ideas from professional analysts, and the numbers from Apex Capital don´t seem unreasonable at all.

The Netflix $100 billion thesis
Netflix is clearly growing at full speed, the company added 4.88 million customers on a global basis during the first quarter of 2015, bringing the total membership base to a massive 62.27 million. In spite of its size, growth is not slowing down; on the contrary, expansion is even accelerating versus 4 million additions in the same quarter last year.

Even in the U.S., which is the company's more mature market, Netflix gained 2.28 million members in the last quarter versus 2.25 million in the first quarter of 2014. Still, the biggest opportunity when it comes to growth over the coming years is in international markets, where the company has a lot of room for expansion. Netflix added 2.6 million international streaming members in the first quarter of 2015 versus a much smaller 1.75 million international additions in the same period last year.

Apex Capital believes Netflix can reach 150 million members around the world by 2020. Other analysts have similar estimates: Scott Devitt, from Stifel, also believes the company is on track to 150 million streaming members in 2020. Even more bullish, FRB Capital calculates the company could reach 180 million subscribers in 2020.

Assuming that the Netflix has the possibility to raise prices and increase profit margins due to the growing value of its content library, Apex Capital estimates that the stock could be worth $2000 in three years, this would imply a total gain of more than 225% from current levels.

On a longer time frame, assuming 150 million members and a subscription price of $15, the firm calculates Netflix could generate an operating margin in the area of 40% of revenues. Assigning Netflix a valuation of 25 times operating earnings; the stock could be worth as much as $3,050 per share, for a huge gain of almost 400%.

This is clearly an aggressive forecast, and a lot of things need to happen for Netflix to achieve that level of subscriber growth and profitability. On the other hand, when looking at Netflix's fundamental strengths and growth potential, the company has what it takes to continue delivering explosive performance over the years ahead.

Netflix is the star of the show
Online streaming is clearly a very attractive industry offering enormous potential for growth, and Netflix's leadership position in the business means that the company is exceptionally well positioned to capitalize on its opportunities.

The company's revenue generation allows it to invest tons of money in content, and this creates an entry barrier for smaller players: Using cost of revenue as a broad proxy for content costs, Netflix spent $3.75 billion in this area during 2014.

Netflix collects enormous amounts of data regarding the viewing habits of its subscribers, and the company leverages that information to buy and produce successful content. Content is king in the industry, and Netflix has both the money and the data intelligence to deliver what viewers want.

More content not only attracts more users, but it also makes the service more valuable to existing ones. This means that Netflix should gain pricing power over time as it increases both the quantity and quality of its content library. Higher prices could do wonders for investors in Netflix stock when it comes to profit margins.

Management has recently announced that it will be accelerating its international expansion plan during the next couple of years; Netflix is expanding its reach from a current base of nearly 50 countries to approximately 200 markets by 2017. According to a recent news report from Bloomberg, Netflix is also in conversations to enter China via some kind of partnership with local players.

Only time will tell if Netflix can reach $100 billion in market value over the middle term. One thing looks clear, though, the company is positioned to deliver massive growth in both sales and earnings over the years ahead, and this could be a powerful return driver for investors in Netflix stock.