Netflix's stock price fell 0.18% to $309.91 after Wells Fargo Securities cut its rating on the streaming company's stock to underperform.
Wells Fargo also slashed its price target on Netflix to $265 a share, down from $308.
Wells Fargo is now just one of six bank or brokerage firms of the 46 that cover Netflix to have put a sell rating on the streaming company, compared to 30 with buy ratings and 10 with holds, according to Bloomberg.
Wells Fargo analyst Steven Cahall contends Netflix's chase for subscribers, as it battles for market share in the fiercely competitive streaming market, could come at a steep cost, with the company effectively overpaying for subscribers in what he calls "growth at an unreasonable price."
While Netflix may be able to meet Wall Street's expectations for subscriber growth, the high-level of spending devoted to fueling this new growth should put a major strain on the company's cash flow, the Wells Fargo analyst wrote.
As a result, Netflix's cumulative free-cash flow could fall below analyst expectations by as much as $18 billion between 2019 and 2025, Cahall wrote.
"Those subs will be more expensive than investors realize," Cahall wrote.
Netflix won't be profitable on a per subscriber basis until 2022, the Wells Fargo analyst wrote. The streaming company is currently bringing in $10.83 in revenue each month for each subscriber, while paying out $12.41 in marketing, content and other costs.
"We think NFLX is a stock in transition," Cahall wrote. " The appreciation in market cap over the last 5+ years has more than proven out the company's streaming + original content business model at global scale. The debate is becoming more nuanced to include FCF generation and competition from other streaming giants."