Netflix, Inc. (Nasdaq:NFLX) stock has been downgraded to Underperform with an $85 per share price target by analysts at Macquarie, who like the company’s long-term prospects but are bearish on its near-term performance. It’s a daring rating from the firm as FactSet data shows that it is only the seventh with the equivalent of a Sell rating. The other 35 analysts covering Netflix stock and reporting to FactSet have either the equivalents of a Hold or Buy rating on it.

On the flip side, the argument for the strength of the company’s original content continues to be a favorite of bulls.

Netflix continues international expansion

One of the key arguments in the bull case for Netflix has been its international expansion, but Macquarie analyst Tim Nollen warns that the process of expansion is much more easily said than done. He notes that the company is moving into many countries that already have home-grown competitors for it. These competitors come in the form of incumbent pay-TV operators have been heavily investing in video-on-demand and/ or streaming video-on-demand offerings, and in many cases, these OTT services are sold as add-ons to current subscriptions.

Further, he notes that “numerous” streaming video services have launched in these international markets, often with lower prices and more local content than what Netflix has. He adds that many of his firm’s global TMT analysts are skeptical of Netflix’s launch efforts with price and a lack of “compelling content” seen as the biggest risks to its success in foreign markets.

Netflix needs more local content

As a result, the Macquarie analyst is estimating that Netflix will have only 73 million international subscribers by 2019, which is below consensus. He believes that in order to find success in many international markets, the streaming company will have to partner with local content producers and/ or invest in either more local content or in content that “will travel.”