Shares of Netflix (NASDAQ:NFLX) fell sharply on Tuesday, and were down about 5% as of 3:07 p.m. EDT.
The stock's decline comes amid a broader sell-off of growth stocks but is also likely fueled by negative analyst commentary on Netflix stock specifically.
Pivotal Research Group analyst Jeffrey Wlodarczak slashed his 12-month price target for Netflix stock on Tuesday from $515 to $350. He cited (via CNBC) the company's high content costs and intensifying competition as key concerns. In addition, Wlodarczak said the company is at risk of posting weaker-than-expected subscriber growth in its third quarter.
Similarly, KeyBanc Capital Markets analyst Andy Hargreaves said Netflix's "setup" going into its third-quarter update "isn't ideal."
"Even good results are unlikely to address competitive fear," Hargreaves explained. "Weak results/guidance in 3Q could raise concerns about longer-term growth that would likely be negative for the stock."
Investors will be able to put these concerns to the test when Netflix reports its third-quarter results next month. The company is scheduled to announce earnings after market close on Oct. 16.
Netflix management guided for 7 million net paid member additions in its third quarter, up from 2.7 million member additions in Q2 and 6.07 million in the third quarter of 2018.