The recent rebound for Netflix may have ended today after a Bank of America Merrill Lynch analyst downgraded shares to “underperform” from “buy.” The stock closed today at $65.54, down 10.9%. That’s a big reversal from the last two weeks. Netflix shares soared 31% after respected analysts including Morgan Stanley’s Scott Devitt, Citi’s Mark Mahaney, and famed hedge fund manager Whitney Tilson urged investors to reconsider the stock — down more than 75% from July 2011 when Netflix split its DVD rental and streaming businesses. But BOA’s Nat Schindler says that “the risks outweigh the reward heading into Q3.” He still believes that Amazon could become a potent competitor following its recent deal to stream EPIX‘s Hollywood movies. In addition, Schindler says he has “less comfort in Netflix’s ability to meet even the Street’s relatively low expectations” to add 6M subscribers to its domestic streaming business. With the recent run-up in Netflix shares, “This quarter reminds us a lot of last quarter, with heavy short covering driving the stock up post quarter end on no or limited news; a set-up we don’t like to see in any hyper-volatile stock like Netflix.”

In another piece of worrisome news, Moody’s Investors Service placed Netflix debt on review for a possible downgrade. The firm cited its “shift towards a potentially more risky business model combined with an increasingly competitive operating environment.”