Even though Netflix is the best-performing stock on the NASDAQ, an analyst suggests investors wait for the right time to make an entry into the stock

Netflix is having a good year so far. It’s the best-performing stock on the NASDAQ, with investors trusting it more than the likes of Apple and Amazon. However, it’s still not the right time to buy the streaming company, SunTrust Robinson Humphrey analyst Robert Peck told CNBC on Wednesday.

Netflix, Inc. Rising But Not A Buy Yet: Analyst

Not the right time

“We love the story. We love the opportunity. We love the underlying trends. We would just look for a better entry point here to get into the stock,” he said. Peck asked investors to be patient with Netflix, which is up 37% this year but is trading at 50 times its earnings.

The company’s fourth quarter earnings report indicated that its efforts to expand overseas are working. The numbers somewhat eliminated the fears that were aroused following the disappointing subscriber numbers in the previous quarter. However, Peck cautioned that expansion overseas may not always bring in positive news.

“Any time you roll out in new markets there could be little hiccups or bumps along the way. I think that’s what spooked people in the third quarter,” analyst said.

Content quality vital for Netflix

In the fourth quarter, Netflix performed well both on the domestic and the international fronts, suggesting that the content offered is being accepted by consumers.

Mentioning hit series such as House of Cards and Orange is the New Black, Peck noted that content is the core strength of Netflix. The analyst also talked about the company’s effort to expand its movie production plans with popular titles such as a sequel to the 2000 martial arts epic Crouching Tiger, Hidden Dragon. The importance of content for Netflix can be viewed from the fact that the streaming company plans to spend about $3 billion on content compared to Amazon’s $1.5 billion investment.

Talking of competition, Peck suggested that Netflix may not lose subscribers when Amazon and HBO sign up new customers. The analyst said there are signs that users are going for multiple streaming services to replace or supplement cable packages. Peck believes users will give a similar amount of time to what they spend watching cable directly on watching their favorite shows on Netflix and Amazon.

On Wednesday, Netflix shares closed up 1.09% at $475.06.