Evercore ISI has lowered its rating on Netflix from “Hold” to “Sell” and has slashed its price target from $450 to $380. This new price target suggests a 13% decline from Friday’s closing price of $438.40.

According to analyst Ken Sena: “We are downgrading Netflix to a SELL rating from HOLD and reducing our target price to $380 from $450 on what we perceive to be an intensifying competitive environment necessitating increased investment with uncertain return. While our 2015 subscriber growth estimates fall modestly by 2% (70.1mm, +22% y/y), we are reducing our consolidated operating income by 26% to $381m (-5% y/y), or 6% of revenues, from $517mm previously, as we no longer view management’s lower y/y op income guidance as conservative. In accordance, our free cash flow drops to negative $677mm for the year, compared to $97mm for Street (which we suspect is a result of a more conservative view of upfront cash commitment needed to fund its content strategy), which includes ~$1.5bn in cash content expense (net of $3.4bn in amortization), with 2016 FCF expected to see only modest improvement (-$393mm).”

In January, Netflix released its fourth quarter earnings report – posting a 72% increase in earnings and a jump in subscriber growth. While the company has shown impressive subscriber growth, its competition has continued to grow. Companies like Amazon (AMZN) have been promoting similar streaming services that could cut into NFLX’s growth.

With the availability to video streaming, consumers demand a wide selection of movies and TV shows, but Netflix is unable to offer it all. Netflix’s expenses have been growing as it adds more content for its subscribers. The company is now spending more on its content than BBC.

Investors interested in NFLX may be interested in the funds listed below. These funds currently have the largest stakes in the company.

The funds listed above allow investors to gain exposure to NFLX while remaining diversified. Investors interested in Netflix may also be interested in Amazon (AMZN) and Time Warner Cable (TWC).

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