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The Analyst Who Got Netflix Right When Everyone Else Was Wrong

Stocks in this article: NFLX

BOSTON ( TheStreet) -- The Netflix (NFLX) downgrade parade finally marched down Wall Street after the DVD-by-mail and movie-streaming company posted the ugliest results since it went public during the dot-com bubble in 2002.

Five analysts at research firms cut their ratings on Netflix on Tuesday after the company said Monday following the market close that it lost 800,000 subscribers in the third quarter. For Netflix investors, it's no help that analysts who recommended buying the stock only three months ago at $300 now say they should hold on to them at $75.

Among them are Goldman Sachs analyst Ingrid Chung, who pinned a "buy" rating on Netflix in March and didn't waver until today, when she cut her rating to "hold" with a $75 price target. JPMorgan analyst Doug Anmuth also said Netflix was a buy in July, a rating he maintained until today, when he downgraded Netflix to "hold" with a $67 target.

As it turns out, many analysts following Netflix thought the high-flying growth stock was still a buy at $300 a share, including those at Oppenheimer, Citigroup, Credit Suisse, Atlantic Equities, Piper Jaffray and Barclays Capital. Some of these researchers even reaffirmed their "outperform" ratings today, even though the stock has crumbled more than 70% in three months.

Tony Wible, an analyst at Janney Montgomery Scott, is among the analysts who downgraded Netflix Tuesday. He dropped his rating on the stock to "sell" with a price target of $51, which would be another 30% loss.

Unlike most of his counterparts, Wible has a long history of being bearish on Netflix. At no point did he recommend purchasing Netflix shares. His "hold" recommendation a week and a half ago, up from a "sell," wasn't an endorsement of Netflix shares, but instead a prelude to his report today, which calls Netflix "a better sell opportunity, as expected."

"We said the stock would run up into earnings and it would be a sell after earnings," Wible told TheStreet today after his downgrade. He has the distinction of being one of few analysts who argued that selling Netflix shares close to $300 was the right call. "Our core pessimism has never changed. I've been consistently cautious on this name. And I think there's more downside."

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