Now that Netflix is negative for the year, Wall Street analysts are starting to panic

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Two more Wall Street analysts have begun expressing doubts about Netflix and warning the company’s coming quarterly earnings may disappoint yet again, just after the stock turned negative for the year.

Pivotal Research Group cut its price target on Netflix shares by nearly a third on Tuesday, to $350 from $515. The firm warned investors that Netflix is facing much higher-than-expected costs to license content, as well as intense competition from media and technology giants.

“The issue lately has been the aforementioned material accelerating content costs, perceived aggressive moves by new Internet players/Apple and this has been exacerbated by increasing investor concern that subscribers in 3Q may once again be weaker than expected,” Pivotal Research analyst Jeffrey Wlodarczak said.

Wlodarczak also said Netflix is headed into its third quarter earnings with the risk of missing expected subscriber growth. Additionally, the analyst could see Netflix forecast worse-than-expected free cash flow losses, likely tied to accelerating content costs.

KeyBanc Capital Markets analyst Andy Hargreaves similarly expressed concern about Netflix’s upcoming results, in a note on Monday titled “Setup into 3Q Isn’t Ideal.” KeyBanc has a sector weight rating on Netflix stock, with no price target.

“Even good results are unlikely to address competitive fear,” Hargreaves said. “Weak results/guidance in 3Q could raise concerns about longer-term growth that would likely be negative for the stock. In-line or slightly better results could drive a modest relief rally, but would not likely address competitive concerns since new services do not launch until 4Q.”

“This suggests only very significant upside in 3Q is likely to drive sustainable upside in the shares, and we have little to provide confidence in that outcome,” Hargreaves added.

Netflix shares slipped 2.3% Tuesday morning from their previous close of $265.92 a share. The stock fell 1.8% on Monday, bringing its decline for 2019 to 0.7%.

Pivotal and KeyBanc join a chorus of concern that began in the past week by Bernstein, which estimates Netflix could fall as low as $230 a share during this plunge, and Barclays, which called the stock “very expensive.”

The sharp move lower in Netflix shares is leading a shift in analysts’ confidence in the streaming service. In July, with Netflix stock up over 40% for the year, Wall Street stuck by Netflix as it lost rights to air “The Office,” its most streamed show. At the time, 38 of the 40 analysts covering the company had either buy or hold ratings on Netflix shares, according to FactSet.

Analysts told CNBC the loss of “The Office” marked a plateau in the stock rather than a top. But, since then, Netflix stock has given up its gains for 2019 as investors watched the company report disappointing second quarter results, coupled with pressure from the coming launch of competing services of Disney, Apple, CNBC owner Comcast and others.

Netflix has dramatically underperformed its technology peers this year in the informal FAANG group — which includes Facebook, Apple, Amazon, and Google-parent Alphabet.

Netflix is the only negative stock for 2019 among the five companies.

Disclosure: Comcast owns NBCUniversal, parent company of CNBC.

Correction: An earlier version misstated Pivotal Research Group’s latest price target for Netflix shares. It’s $350.

CNBC’s Michael Bloom contributed to this report.

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