RBC's Mark Mahaney: No Reason To Buy Netflix Right Now

Netflix, Inc. (NASDAQ: NFLX) is scheduled to report its fourth-quarter results after Wednesday's market close, but investors shouldn't be rushing in to buy the stock ahead of the print.

RBC Capital Market's Mark Mahaney was a guest on CNBC's "Halftime Report" and argued that expectations are set high for Netflix's report, especially since it is trading close to the all-time highs.

Mahaney continued that Netflix's subscriber numbers are expected to be higher by year-end compared to last year so investors should take advantage of any weakness in the stock after Wednesday's report — if any.

'Bubble Basket?'

Greenlight Capital's founder David Einhorn argued in a letter to his investors on Tuesday that Netflix is part of what he describes a "bubble basket" of stocks.

Einhorn believes Netflix's domestic market has matured, but Mahaney doesn't believe that is the case given his belief that domestic subscribers will end 2017 higher than it was a year ago.

Mahaney continued that Netflix has approximately 45 million domestic streaming subscribers today, but the long-term potential stands as high as 70 million although the company's CEO Reed Hastings sees the market growing to 90 million.

Mahaney argued that a "seismic shift" is underway where consumers are moving away from pay TV towards streaming. In fact, Netflix is "far and away the leader" in the streaming space, and the market is nowhere near the end of the growth cycle.