In case you were too busy watching House of Cards to notice, Netflix (NFLX) is on a bit of a tear right now.

The company recently underwent a 7-for-1 stock split, beat earnings estimates, and surged almost 18% the day after announcing second-quarter results. It was already the best-performing stock in the S&P 500 this year by a wide margin, but now it’s lapping even the closest competitors. The chart below shows Netflix’s gain versus the S&P 500 so far this year:

To put this in perspective, 2015’s second-best performing stock in the S&P, Electronic Arts (EA), is up just 54% year to date.

Netflix’s incredible run (the stock is up a ridiculous 500% in the last five years) can be attributed, at least in part, to robust subscriber growth. In the latest quarter, Netflix added 3.3 million new subscribers. That gives it an impressive total of 65 million, and most projections point toward accelerating subscriber growth going forward, particularly outside of the United States. In the latest quarter, 2.5 million of the 3.3 million new subscribers came from overseas, where Netflix hopes to quadruple the number of countries it reaches in the next 18 months.

If that wasn’t enough, Netflix also reported 22% revenue growth compared to the same period a year ago. Basically, we should all rush out and buy as many shares as we can, right?

Not so fast. Netflix is undoubtedly on a tear, but there are a few warning signs, too – including a skyrocketing valuation that seems impossible to justify. Currently, Netflix has a price-to-earnings (P/E) multiple of 211x and a forward P/E of 277x. Yet, free cash flow has been negative over the last 12 months and net income was a measly $24 million in the most recent quarter.

Investors are hoping that Netflix can expand its brand overseas, maintain steady growth in the United States, and begin increasing prices without losing a substantial number of subscribers. Otherwise, this incredible run is going to come to an abrupt halt.

Good investing,

Chris Worthington