Netflix, Inc. (NASDAQ:NFLX) announced earnings last night, and knocked the ball out of the park. They raised their subscriber base by about 3.3 million people, which amounts to an increase of over 5%. The company now has 66 million subscribers to its service, about 43 million of which are here in the United States. To put that in perspective, about one out of every three American households is now a Netflix subscriber.

I joined CNBC’s Martin Soong and Oriel Morrison to chat about Netflix, suggesting it’s a very decent speculative buy with your “play money.” But given its high valuation, I recommended keeping your position size small and steering clear of it with your nest egg. Netflix trades for about 7 times sales and over 200 times earnings. Looking at market cap, Netflix is already considerably larger than CBS Corporation (NYSE:CBS). Netflix is a $45 billion company at current prices, whereas the established CBS only fetches $27 billion. Time Warner Inc (NYSE:TWX), which owns the CNN and HBO franchises, among others, has a larger market cap of $75 billion. But Time Warner is also one of the largest media companies in the world, so it’s probably not realistic for Netflix to grow to its size. at least not any time soon.

In other words, trade Netflix but don’t marry it.

The only metric Wall Street seems to be watching these days is subscriber growth. So long as the subscriber base continues to grow, Netflix’s massive content costs get spread across a larger base, and everyone’s happy. But as I told Oriel, with the high expectations built into the share price, Netflix is one quarterly miss away from taking a major tumble.

I expect U.S. subscriber growth to slow considerably in the quarters ahead. With one in three American homes already subscribing, the torrid growth phase is mostly over. To an increasing extent, new growth will come disproportionately from overseas. That’s a good thing, of course. But it also brings with it new challenges. For example, Netflix indicated it might not make it into the Chinese market on its original timeline due to regulatory delays.

Regardless, if you’re long Netflix, enjoy the ride. This is one of the great growth stories of our generation.

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