Disclosure: Affiliates controlled by the writer of this column have a long position in Netflix.

Netflix is knocking on the door of $200 a share ahead of its Q3 earnings report on Monday afternoon.

Its market cap is greater than Time Warner‘s. And Wall Street is excited about its announcement this week that it’s raising its prices on its two higher-priced subscription plans.

Yet, there’s more room for optimism about Netflix’s current string of success and it comes down to assumptions relating to how big it can grow its subscriber base.

At its latest earnings report released in July, Netflix claimed more than 99 million paying subscribers around the world and 50 million in the US alone. They will announce their latest numbers in their earnings report next week.

Several years ago, analysts thought the US ceiling for Netflix was 30 million subscribers because that’s where HBO had hit its upper limit in the past. Netflix proved them wrong.

Could it continue to grow its subs meaningfully from here? I think so.

We used to assess Netflix’s sub potential based on the number of US households. Yet, Hulu revealed an interesting detail in their recent Advertising Week presentation in New York: 10 to 15 percent of their current users are mobile-only, and this segment is growing quickly.

Are these mobile-only subs the cord-cutters? Maybe. In that case, the former cable households are perhaps simply replacing themselves as mobile-only users.

But they also might be additive.

Are people going to subscribe to both the cable ecosystem and Netflix? They already are in big numbers. This is because — even with the recent price hikes — Netflix’s cost is relatively small compared to the cable bundle.

There are 117 million US households today, according to Google. That’s bigger than the peak of 100 million pay TV subscribers.

Last quarter, If mobile-only subs can actually grow the pie beyond the pay TV ecosystem, it might even be possible for Netflix to rise above 100 million US subs longer-term. And that’s assuming password-sharing in the same household.

The rise of mobile-only subscribers will be equally strong (if not stronger) internationally. International’s footprint is already bigger than the US footprint today and so will probably only increase its lead.

So if 100 million is a long-term target for Netflix subs, the international market target is probably a minimum of 150 million. That’s a total of 250 million.

Currently Netflix is doing $10.2 billion in annual revenue on 103 million global subs. That works out to about $8.21 per subscriber per month.

Project ahead 5 years. If it’s able to raise prices $1.20 each year and has 250 million subscribers, Netflix will do $42.6 billion in revenue that year well ahead of $10.2 billion in the past year. If they can be much more efficient on that extra $32 billion a year in revenue instead of the first $10 billion a year, they could do $14 billion in EBITDA in 2022. That’s a lot more than the $700 million in EBITDA they’ve done in the last year.

The bottom line here is that Netflix’s sub base has a chance to more than double in the long-term. Watch for mobile-only users to be a key part of that growth.

Commentary by Eric Jackson, sign up for Eric’s monthly Tech & Media Email. You can follow Eric on Twitter @ericjackson .

Source: Tech CNBC
Mobile-only customers are the key to the next wave of Netflix growth