Netflix Inc. (NFLX) earnings are out! And while the top-line was a big beat, $0.09 vs $0.02, the stock cratered about 14%. The real news was a huge miss on subscriber growth. Subs, for Q2, increased by 1.7mil vs estimates of 2.5mil. Also, streaming revenue and total subscribers missed analysts' estimates.

Analysts now cite huge cash needs for later in the year, expecting a coming debt financing. Also, there has been an apparent negative effect on browth based on their recent price increase. Some years ago, a price increase brought a massive debacle in the NFLX stock. So this seems like a "rerun." With a P/E over 300, and a deluge of analysts now lowering targets, this decline seems far from over.

Our analysis had NFLX stock on our "Riskiest for 2016" list. You can see that update here: Best & Riskiest Stocks First Half Recap.

We had two main reasons for putting out the big caution flan on NFLX at the start of the year. AMZN had been offering deals on "Prime." and was adding a huge number of subscribers. That service, besides getting great deals on shipping, included their streaming video service. That was a very significant, and broad, direct competition for NFLX service, for much less per year. Also, our technical analysis had NFLX suggested a high probability of it being negative stock. 

Note our chart below, which had our cycle projections for NFLX declining into August. 

(Click on image to enlarge)

Based on this analysis, it is reasonable to expect NFLX to reach its major 61.8% target around 79 by late August. 

We hope this analysis is insightful and look forward to your comments on this article!