Netflix Inc. (NASDAQ: NFLX) reported less than stellar earnings on Wednesday after the markets closed. Also considering its high price-to-earnings (P/E) ratio of 501 (Wednesday’s close vs. estimated 2015 earnings) investors were not pleased, and there was a sizable sell-off. As a result, analysts have weighed in on this heavily watched stock, to discern what direction Netflix is going.

The online streaming giant had $0.07 in earnings per share (EPS) on $1.74 billion in revenue, compared to consensus estimates from Thomson Reuters of $0.08 in EPS on revenue of $1.75 billion. In the same period of the previous year Netflix posted EPS of $0.14 and $1.41 billion in revenue.

Global membership grew to 69.17 million members, up 3.62 million, compared to prior year growth of 3.02 million, and a forecast of 3.55 million.

The company added 0.88 million new U.S. members in the quarter, compared to 0.98 million last year and a consensus forecast of 1.15 million, marking the fourth consecutive year Netflix has added about 6 million members in the United States. International net additions totaled 2.74 million, compared to 2.04 million in the prior year and a 2.40 million forecast.

Credit Suisse gave its investment case as:

Citing modestly higher churn due to industry transition to chip-based credit/debit cards as well as continued currency headwinds, Netflix reported weaker-than-expected third quarter for both domestic and international streaming revenue, which also filtered through to fourth quarter guidance. We note that these exogenous headwinds do not in any way alter Netflix’s consumer value proposition and hence should not alter its adoption path. We therefore modeled a modest headwind to near-term net adds but baked in a recovery for the second half of 2016. We remain on the sidelines for now on valuation and maintain our Neutral rating; our target adjusts lower as we contemplate a higher level of spend on Technology given the anticipated product launch in additional international markets.

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The brokerage firm adjusted its 2016 estimates based on these projections. Credit Suisse now expects EPS to be $1.18 on $5.3 billion in revenue, compared to the previous estimates of $1.31 per share on $5.47 billion. Credit Suisse also lowered its price target to $124 from $130.

Canaccord Genuity stated in its report:

Netflix reported weaker-than-expected results after the market close this evening, with key performance indicators (i.e., net subscriber additions) significantly below expectations. In addition, revenue was weaker than expected due to lower domestic subscribers and incremental currency pressures weighing on the international operations. While the domestic subscriber additions were surprisingly weak, management identified the ongoing transition to chip-based credit and debit cards as causing higher-than-expected involuntary churn. Importantly, management believes the company remains on track to add about as many US subscribers as in 2014, and reiterated previous long-term goals for domestic subscribers and contribution margins.

The firm does not believe the results will weaken its long-term thesis. Although, Canaccord Genuity is lowering its near-term estimates to account for the recently announced new market launches, the timing of which had previously not been considered in the model, and price increases, which came much quicker than the firm had anticipated. Overall, Canaccord Genuity expects 2016 estimates to be weaker than previously forecast, and a higher projected average revenue per user drives modest upside to the previous price target of $120.

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A few other analysts weighed in on Netflix after it reported earnings as well:

• Needham has a Buy rating and raised its price target to $125 from $111.
• JPMorgan has an Overweight rating and raised its price target to $137 from $127.
• Mizuho reiterated a Neutral rating.

Thursday morning, shares of Netflix were down 7.2% at $102.24, with a consensus analyst price target of $121.12 and a 52-week trading range of $45.08 to $129.29.

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