Shares were down 5%. The stock soared last week after third-quarter earnings expectations beat analysts forecasts.
Barclays said in a report that it was surprising "that investors appear to have transitioned to a valuation framework based on digital net adds rather than earnings."
The report said that this was evident in the stock's reaction after the third-quarter results which resulted in fourth-quarter EBITDA guidance "being lowered meaningfully below consensus but the stock going up 7% on the back of just the beat in subscribers."
"We believe this valuation transition is too premature and could force suboptimal choices on management," the report said.
New York Times last week said digital subscriptions increased 24% to 3.1 million from 2.5 million a year ago. Advertising revenue, including digital and print ads, rose 7.1% $121.7 million from $113.6 million a year ago. Digital advertising was up 17%. Total subscriptions as of the end of the third quarter were 4 million.
Barclays' analysts also said they believed the company's subscription acquisition cost is currently higher than it should be for a company at its stage of digital subscription growth.
The report added that "as much as we like the digital story and believe it is likely to continue scaling over the coming years, we believe the momentum in this stock has taken valuation to levels that will need a very different trend line for growth relative to the one the company is on."