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When everyone gives up on Netflix, smart money does this

Netflix shares are getting slammed Tuesday, but the smart money might be getting ready to binge on the streaming media company's shares.

Analysts say the situation at Netflix is not all that bad and suggest the 10-percent-plus drop since Friday's close may be the latest of many post-earnings buying opportunities. If you don't trust Wall Street analysts, consider Carl Icahn, who once made billions on his well-timed trade after mass hysteria about Netflix's future.

Netflix reported after Monday's close that it beat analysts' projections for first-quarter profit, earning $27.7 million, or 6 cents a share, as sales rose 24 percent to $1.96 billion, narrowly missing forecasts of $1.97 billion. But what got the market's attention was a cut in Netflix's second-quarter guidance for new-customer signups outside the United States. Instead of the 3.4 million new non-U.S. customers the market expected, Los Gatos, California-based Netflix told investors to expect about 2 million, on a base of 34.5 million internationally and 81.5 million, including Americans.

But Wall Street analysts are telling clients that this is a Netflix movie we've seen before: The challenges of forecasting the growth in Netflix's business have always led to booms and busts in the shares.

"While many investors may consider bailing on the Netflix story today (which reminds us of the investor narrative in October 2014, as the stock was plunging following [third-quarter]), we continue to believe Netflix is on track to pass 100 million subscribers globally in early 2017 and reach 150 million subscribers globally by the end of 2020," BTIG Research analyst Rich Greenfield wrote in a blog post. "If anything, Netflix's success in driving penetration in the most competitive media market in the world, the U.S., strengthens our confidence in their ability to execute globally."

That 21 percent 2014 drop isn't the only one. Netflix also dropped 23 percent after the second quarter of 2010's earnings came out. And they were hit hard during the market's bout of fear about junk bonds and China last fall, losing more than a...