Netflix Inc. (NFLX) is under pressure in trading Thursday after UBS took its rating on the streaming content provider to neutral from buy based on the stock’s strong run this year.

In a research report covered by CNBC this week, UBS analyst Eric Sheridan said all the future good news is already represented in the share price. “We believe Netflix's core competencies in both content & tech should drive a virtuous circle of greater subs[criptions] and increased viewing time, broadening its moat for global leadership in SVOD [streaming video on demand],” Sheridan said in the research note. “It's all priced in.”  

Business Prospects Compelling, Stock Not So Much

The analyst is upbeat about Netflix’s business prospects over the long term but said the stock is “less compelling”  at current levels and already prices in five years of “excellent forward operating performance” while underestimating risks such as free cash flow  burn and dependence on capital markets to reach its content spending goals. According to Sheridan, Netflix’s stock is trading at 39 times his estimated EBITDA for 2022 on the back of upbeat forecasts including 15% annual subscriber growth. (See also: 3 Streaming Stocks Not Named Netflix That Can Soar.)

Recently shares of Netflix were trading down 1.8% or $7.61 to $411.04 a share. So far this year shares of the leading streaming content provider have more than doubled. While Sheridan took his investment rating down, he did raise his price target to $425 from $375, which implies the stock can gain around 3% more. The analyst also took issue with the potential for upside in the second quarter, warning that he doesn’t expect much of that compared to prior quarters.

Option Traders Expect Netflix to Surge

While Sheridan isn’t expecting much in the way of upside out of Netflix after it reports second-quarter results, option traders are, betting shares could gain another 10% after it weighs in with Q2 earnings after the close of trading Monday. (See also: Netflix Traders Bet Stock Will Gain 10% After Results.)  

Wall Street is looking for the company to post a monster second quarter, with earnings expected to climb by over five times to $0.80 versus last year. Meanwhile, analysts see revenue climbing by over 41% to $3.94 billion. For the full year, analysts expect earnings to more than double with revenue forecast to increase 38%. In 2019, Wall Street expects earnings to increase by close to 65% and revenue to grow 25%.