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(NFLX) - Get Report

is drawing a divide on Wall Street.

The bulls are clamoring for a recovery in the stock, while the bears argue company's business model is broken.

Wedbush Morgan analyst Michael Pachter downgraded the stock to underperform from neutral, citing concerns over costs associated with international expansion, higher content expenses and customer defections.

Pachter also predicts that there may be no bottom Netflix's losses in 2012. The company said earlier in the month that it expects to incur losses for all of next year, but did not specify just how big of a loss.

"We are particularly concerned by the company's 'grow at all costs' business model," Pachter wrote. "Netflix management is willing to incur losses for all of 2012 in order to chase international expansion; we think that international subscribers will generate losses for the foreseeable future at a time when the company has alienated its most profitable domestic customers with its sharp price increases; further challenging profitability."

Standard & Poor's also lowered Netflix's credit rating earlier this week on the company's expected loss in 2012. The ratings agency cut its assessment of Netflix's credit to 'BB-' from 'BB' and kept its outlook at stable.

"Our expectation

is that escalating content commitments will lower profitability over the intermediate term, international expansion will have a greater impact on overall profitability, and a return of domestic subscriber growth could occur slightly later than we initially expected," S&P credit analyst Andy Liu said in a statement.

But not everyone is so negative.

Susquehanna Financial Group analyst Vasily Karasyov lifted his rating on Netflix to neutral from negative on Monday.

"We believe risks to fundamentals and valuation remain to the downside, but very low visibility into the drivers and a significantly lower stock price largely offset the downside potential," he wrote in a note. "We believe the stock could recover to the mid $70¿s if U.S. subscriber additions recover sooner than we expect - a relatively low probability scenario in our view."

And hedge fund manager Whitney Tilson recently told


that the stock could double in the next few months with some good news.

Shares of Netflix were falling 2.6% to $65.80 in morning trading.


Reported by Jeanine Poggi in New York.

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