Netflix's fundamentals don't look good, and investors should stay away, Michael Pachter of Wedbush Securities said Wednesday on CNBC.
"This is a worse company today than it was a couple of years ago," he said. "They have destroyed their DVD business, which is the source of three-quarters of their operating profit. They are chasing windmills overseas, and the content owners are never going to let them make money there."
On "Fast Money," he said that Netflix "did something very clever in the fourth quarter" by cutting spending.
"That lower spending was lower tech spending, lower marketing spending," Pachter said. "I don't get how investors think that one-time tweaking of their spending is worth $5 billion. Nothing changed. I mean, all they did was become profitable. People thought they were going to lose a little bit of money, like $10 million. They made $13 (million). Who cares? I don't get it."
Pachter noted that Netflix had "very good" subscriber growth in the United States, but that investors were overstating what that meant for the bottom line.
"They're valued like they're going to make $30 per domestic sub, and they make about $2.50, so they have a long way to go before you can justify this valuation," he said. "I don't see it going higher."
He held a "sell" rating on Netflix stock and a price target of $55 per share.
Pachter's call came a day after Mark Mahaney of RBC Capital Markets laid out the bull case for Netflix stock and shared what he believed to be catalysts that would propel the stock to $210 per share.
"I love Mark. He's an incorrigible optimist," Pachter said. "I'm more of a cynic."
(Read More: Netflix Has Two 'Great Secular Drivers': Mark Mahaney)
Trader disclosure: On March 6, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long MSFT; Karen Finerman is long GOOG; Karen Finerman is short PAY; Karen Finerman is short SPY; Karen Finerman is short IWM; Brian Kelly is long BOVESPA FUTURES; Brian Kelly is long HONG SENG FUTURES; Brian Kelly is long GOLD FUTURES; Brian Kelly is long EURO FUTURES; Brian Kelly is short Copper futures; Tim Seymour is long AAPL; Tim Seymour is long BAC; Tim Seymour is long INTC; Tim Seymour is long SBUX; Tim Seymour is long MBI; Tim Seymour is long VALE; Tim Seymour is long PBR; Tim Seymour is long RIO.
