Netflix, Inc. (NASDAQ:NFLX) had a hot year in 2013, but analysts from at least one firm think the trend won’t continue this year. Morgan Stanley analyst Scott Devitt and his team have downgraded Netflix to Underweight and cut their price target from $333 to $310 per share. However, CNBC‘s Jim Cramer still likes Netflix—at least for momentum investors, which he isn’t. He sees a $30 billion valuation on the company.

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Shares of Netflix declined as much as 5% today after the downgrade from Morgan Stanley.

Competition to intensify for Netflix

According to Devit’s report today, they believe Netflix, Inc. (NASDAQ:NFLX) is going to see intensifying competition this year. They expect the video streaming industry to really heat up in 2014, putting Netflix’s business at risk. They see Amazon.com, Inc. (NASDAQ:AMZN)’s Prime service as becoming a serious contender, along with Hulu Plus and HBO Go.

The analysts believe these services will really start to take a chunk out of Netflix’s gross subscriber growth this year and result in higher costs for marketing and content in the key U.S. market.

Netflix’s penetration getting too high?

The Morgan Stanley team also suggests that Netflix’s business may be “more highly penetrated than the market thinks.” They said even if the company’s churn levels drop to record lows, more than 48 million of the 92 million residential broadband households would need to watch Netflix over the next 12 months in order to meet their 39 million domestic subscriber forecast for this year. That’s about 53% of the addressable market.

They also note that if Netflix’s monthly churn ends up closer to its 4% long-term average, the number of homes would have to hit about 52 million or 57% of the addressable market.

Market could be pricing in 60 million households

The analysts also believe that because of how high Netflix, Inc. (NASDAQ:NFLX) shares have gotten, Wall Street could be pricing in between 60 million and 65 million U.S. streaming subscribers for Netflix over the long term. That’s a 57% to 62% penetration of estimated 2022 broadband households They say this is “close to 80% potentially using Netflix at some point during that year unless churn rates fall to a fraction of recent levels.”

In addition to downgrading Netflix, they also cut their 2014 / 2015 domestic subscriber forecast to 5.2 million this year and 3.1 million next year. That’s compared to their previous estimates of 5.5 million and 3.5 million respectively.

Jim Cramer sees upside to Netflix

After the Morgan Stanley report, Jim Cramer talked about Netflix, Inc. (NASDAQ:NFLX) on CNBC, saying that the firm’s downgrade was “premature.” He said the company could even raise the price of its service and “no one could know the difference.” He also called the Netflix story “a really powerful story by a really excellent CEO.”

Instead of focusing on the U.S. market like Morgan Stanley analysts did, Cramer looked at the international market, which is where he sees potential upside for Netflix. He said the company’s current valuation could be about $10 billion short of where it ends up being, predicting that Netflix could be valued at $30 billion one day. However, in order to do that, he said it would need to triple its international subscriber base. He said this seems like something the company can do because of its solid business model and low prices.

Cramer did emphasize, however, that Netflix, Inc. (NASDAQ:NFLX) remains a momentum stock right now, as it has a price to earnings ratio of over 290 times. He said this isn’t his “style of investing,” but momentum investors like to ride with the tide.