Longtime Netflix bear Michael Pachter of Wedbush Securities raised that argument in his note today, arguing that Netflix shares are really worth only $45. Amazon is likely to boost both marketing spending for its video service and its new programming, he argued, since Amazon just announced it will offer video to customers who don't also buy its discounted-shipping Amazon Prime service.
"Content spending continues its inexorable rise, and Netflix commented that it expects at least another $1 billion growth in spending (more on a cash basis) in 2017," Pachter said. "Additionally, we think that now that it is a standalone service, Amazon Video will up the ante for acquiring new content. This creates a double-whammy for Netflix — higher content spend and slowing subscriber growth."
Netflix has overcome early problems in international markets before, especially in Latin America, bulls like Mahaney say. And the several analysts, other than Pachter, who cut price targets for Netflix Tuesday all continue to see the shares rising 15 percent or more in the next year.
"One shouldn't worry too much about quarter-by-quarter fluctuations, but NFLX shares are highly sensitive to near-term sentiment," Macquarie Securities analyst Tim Nollen said. His target is $110. "It may take a quarter or two to see a better growth trajectory."
— By Tim Mullaney, special to CNBC.com