Albert Fried & Co. reiterates its Underperform rating and $80 price target on Netflix (Nasdaq: NFLX) following Q2 results.

Albert Fried said it was estimating 1.5 Domestic sub additions on the strength of original content and the table market. Netflix reported additions of 610,000 subs. The firm noted, If Arrested Development added d 1 million subs, which we think is reasonable given the hype, the business outside of originals lost subscribers.

We think NFLX faces a “Cronut hole in 2014” as NFLX faces increasing content costs from amortization, slower sub growth and increased competition, commented Albert Fried. We think earnings turns negative again until more modest subscriber growth and cost controls take hold. However with NFLX, we think expectations and valuation has been raised to bubble levels. We think this Company may need a new management team.

Albert Fried thinks fans were unhappy with Arrested Development and it would be a huge mistake for Netflix to pay up for the fifth season of the show.

The firm is leaving Q313 estimates unchanged, because Netflix streaming subscriber guidance is in line to our estimates and we think higher DVD sub losses due to changes in mail delivery and technology change should weigh on EPS. EPS is expected at $0.23 with revs of $1.03 billion.

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Shares of Netflix closed at $264.58 yesterday, with a 52 week range of $52.81-$270.31.