Netflix, Inc. (NASDAQ:NFLX) has some great potential for growth, according to analysts at RBC Capital Markets. They have just initiated coverage of the stock, giving it an Outperform rating and setting their price target at $210 per share. The company smashed earnings expectations in January, sending the stock skyrocketing.

Netflix, Inc. (NFLX) Potential Not Reflected In Its Share Price: RBC

Today trading on shares of Netflix, Inc. (NASDAQ:NFLX) is mostly flat, right around $181 per share. The stock has been rising steadily since that positive earnings report in January.

In a report issued to investors, RBC Capital analysts said they believe Netflix “has achieved a level of sustainable Scale, Growth & Profitability that isn’t currently reflected in its share price.” They then addressed what they see as three key questions regarding shares of Netflix.

First they considered how large the company’s subscriber base can get. Currently Netflix has about 30 million subscribers in the U.S., and the company’s growth rate has been accelerating. At this point, it has about a 25 percent penetration in the U.S. household market, but they expect more growth out of the company.

They say Netflix, Inc. (NASDAQ:NFLX) is a direct beneficiary of two major Internet trends right now: the rise in the number of devices connected to the Internet and the rise of online video consumption. The analysts also did some checks on subscriber satisfaction levels, and they believe Netflix will be able to surpass 33 percent penetration of U.S. households.

The second question addressed by the analysts was whether Netflix, Inc. (NASDAQ:NFLX) will be able to grow profitably. They believe this has already been demonstrated because the company’s streaming contributions have been expanding consistently over the last four quarters. Their research also indicates that churn is at two-year lows, which should boost further profitability for the company.

And finally, they looked at the significance of the competitive risks surrounding the company. Netflix does face competition from a variety of outlets, including, Inc. (NASDAQ:AMZN), YouTube and others. However, they point out that Netflix’s content acquisition scale and user experience advantage could help to mitigate this risk a bit.