Netflix, Inc. (NASDAQ:NFLX) investors have had an incredible 2013. Since January 1, the company’s stock price has risen by more than 95%. Netflix shares currently stand at just over $180, and they’ve remained reasonably stable at that level since early February. With a 2012X P/E of more than 600, how cant that valuation possibly be justified?

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The answer, according to a new Macquarie Research Report, lies in the company’s US subscriber growth numbers. The firm’s active subscriber numbers reached 27.2 million in the fourth quarter of 2012, and the company expects to see 28.9 million at the end of the first quarter of 2013. Netflix, Inc. (NASDAQ:NFLX) is growing voraciously, but there are weaknesses.

There are a couple of problems with the firm’s subscriber base. One of the most obvious is that the company has still failed to make headway outside of North America. Netflix has to strike separate content deals in other countries, erasing their moat once they go abroad. Competitors, like Amazon.com, Inc. (NASDAQ:AMZN) are pushing in on other continents.

The near impossibility of striking international content deals means that Netflix has to pay for the same content at least twice if it wants to offer it in another jurisdiction. This drives the firm’s content costs up, and those are already significant. According to the Macquarie report, Netflix, Inc. (NASDAQ:NFLX) has $5.6 billion in content liabilities, with more than $3 billion hiding off the balance sheet.

There are a huge amount of problems with Netflix, Inc. (NASDAQ:NFLX) right now, but the firm’s potential is huge. Its brand has become household in just a few years, and its monthly payment model is exactly the kind of revenue stream that investors love. $180 per share and a valuation of around 135X E2013 have probably priced in most of the potential. The question is whether or not the risks have been correctly assessed.

Netflix, Inc. (NASDAQ:NFLX) has a low moat outside of North America. Competitors are lining up, and some investors are worried about some of the changes made in spending in the fourth quarter of 2012. The firm’s fantastic earnings report may have been augmented by a one off wind fall.

Netflix, Inc. (NASDAQ:NFLX) has paid off hugely for anyone who got in at the start of the year. Investors looking to get in now may not be so lucky. The Macquarie report set a twelve month target of $180 on Netflix shares.