3 analysts who just cut their rating on Netflix explain why they're less bullish on the stock

• Netflix fell 25% on Friday after its fourth quarter earnings report revealed a big subscriber miss.
• The results led to a slew of downgrades by Wall Street analysts.
• "The current soft patch and little mid-term visibility inspires a more conservative outlook," Credit Suisse said.
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Netflix plunged as much as 25%, its worst single-day decline since 2012, after the company gave first-quarter subscriber guidance that badly missed estimates.

The streaming giant said it expects to sign up 2.5 million new subscribers in the first quarter of 2022, which is less than the 3.98 million subscribers it added a year earlier. Some Wall Street estimates put first-quarter additions at 6.9 million.

And while Netflix's fourth-quarter earnings results beat analyst estimates, poor visibility into future growth sparked a slew of analyst downgrades from Wall Street.

Here's why three Wall Street analysts just got less bullish on Netflix stock.

Credit Suisse: "Growth expectations reset."

Credit Suisse downgraded Netflix to Neutral and lowered its price target to $450 from $740.

"As revenue growth heads towards single digits investors will start shifting from EV/Sales to more traditional valuations that are less favorable for Netflix at its current growth trajectory...Whether simply a long hangover from the pandemic pull forward, competition having an increasing impact, and/or the march towards 100% of homes streaming taking longer than expected, the current soft patch and little mid-term visibility inspires a more conservative net add outlook, and streaming models have high operating leverage," Credit Suisse said.

Morgan Stanley: "The content is back, but the net adds are not."

Morgan Stanley downgraded Netflix to Equalweight and lowered its price target to $450 from $700.

"The 1Q22 guidance implies this ramp in content is not translating into the 20-25 million net adds we have underwritten historically. Engagement is growing, churn is declining, and Netflix clearly has pricing power...However, bringing that incremental new member to the service is proving more challenging than we anticipated," Morgan Stanley said.

Monness Crespi Hardt: "Elusive recovery is here, possibly worse."

Monness Crespi Hardt downgraded Netflix to Neutral and removed its prior price target of $730.

"It appears nefarious forces lurk beneath the surface of the Netflix recovery, either in the form of a weaker-than-expected global economy or a platform that has hit a wall in terms of attracting new users in mass...We found the tone of the call lacking the confidence of past gatherings as the team struggled with the exact forces holding back paid net additions," Monness Crespi Hardt said.