Image source: Netflix.

The market rallied yesterday after the Fed left rates unchanged, but a company that didn't leave its rates unchanged this summer went the other way. Shares of Netflix (NFLX 2.39%) slumped 3% lower on Wednesday, following a third-party report on problematic churn at the leading streaming video provider.

M Science is forecasting that Netflix lost as many domestic subscribers as it gained this quarter, resulting in zero net additions in its home market. M Science -- a big data analytics and research specialist -- is leaning on its data mining prowess to predict that Netflix fell roughly 300,000 subscribers short of its earlier guidance calling for 300,000 net domestic additions.

That would be a pretty big deal, naturally. Netflix has earned investors' distrust of its guidance. The dot-com darling that would routinely lowball its near-term outlooks proved mortal two months ago. It fell woefully short of its standing forecast for the second quarter, and its outlook for the current quarter at the time was also well below what the market was expecting. Wall Street pros routinely park just ahead of Netflix's subscriber historically conservative guidance. Analysts are still taking the over on this bet -- with the analyst consensus calling for 351,000 net domestic additions for the quarter ending next week -- but if M Science is right, it could be the end of Wall Street trusting Netflix.

You don't know you hit a peak until you're going downhill

Netflix had 47.1 million domestic subscribers at the end of June, and according to M Science that's where we will be at the end of this month. It's an ominous notion given the stock's lofty valuation and perhaps more importantly its content model. Streaming content obligations are moving higher with every passing quarter. We're at $13.2 billion today. If subscriber growth stalls or -- yikes -- starts declining, it will be the ugly side of leverage on display here.

Thankfully, it probably won't happen anytime soon. For starters, let's dig deeper into M Science's call for flat account growth. The reason for the spike it sees in churn rests on the end of grandfathered subscribers paying $7.99 a month. When Netflix pushed the rate for its most popular streaming plan to $8.99 a month two years ago it promised existing members that it would honor the original $7.99 a month rate for two years. The monthly price moved to $9.99 last year. It waited 27 months before rolling out the change to most of its longtime customer base in August, and M Science estimates that 93% of those streaming pioneers were already paying the going rate by the end of last month. 

This means that this quarter's flat showing would be a one-time event. Anyone paying $7.99 a month since May of 2014 had an incentive not to cancel since it would trigger the new rate on their return. That carrot's now gone. However, if the new bill for $9.99 a month in August and September didn't push a subscriber over the edge, they're not likely to cancel in the near future. 

From a financial perspective, this also means that Netflix will be making a lot more money off of these subscribers. Flat subscriber growth when average revenue per user is moving higher is still top-line growth. 

We also can't dismiss that Netflix is a global company. The U.S. will always be its biggest market, but 47.1 million is less than 57% of its 83.2 million total subscribers. Overseas growth has been the driver at Netflix, and that's where 2 million of the 2.3 million net additions that it's targeting for the third quarter should be coming from.

Netflix's sloppy second quarter was already putting a lot of pressure on the media distributor's Oct. 17 announcement of its latest financial results. Yesterday's M Science findings may mean a lot of sleepless nights for Netflix shareholders between now and then, but investors should be comforted in knowing that no third-party source is gospel. Even if M Science is right, strong international growth or a spike in average revenue per subscriber could still save the day.