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Top analyst: Here's why Netflix bears are wrong

Reed Hastings, Netflix
Jacopo Raule | Getty Images

One of the top analysts on Wall Street told investors to buy Netflix, saying the main bear case against the company is simply wrong. The shares are down more than 17 percent this year.

"We believe bearish views of Netflix's content costs generally reflect a misunderstanding of the business model, or a failure to segment investments and view returns over time," Pacific Crest's Andy Hargreaves wrote in a note to clients Tuesday.

"The negative view misses the model's history of strong returns in the United States, underestimates the leverage a dominant distributor can create over time, and undervalues Netflix's unique position in a massive global market."