Netflix (NASDAQ:NFLX) Shares Gap Down After Analyst Downgrade

Netflix, Inc. (NASDAQ:NFLX)’s stock price gapped down prior to trading on Friday after Wedbush lowered their price target on the stock from $105.00 to $90.00. The stock had previously closed at $72.61, but opened at $69.87. Wedbush currently has an outperform rating on the stock. Netflix shares last traded at $70.9890, with a volume of 8,465,529 shares.

Several other equities analysts also recently weighed in on NFLX. Guggenheim reiterated a “buy” rating and set a $80.00 target price (up from $75.00) on shares of Netflix in a research report on Thursday, October 1st. Barclays set a $70.00 price target on Netflix and gave the stock an “equal weight” rating in a research report on Wednesday, October 7th. CLSA started coverage on Netflix in a research report on Monday, July 20th. They issued an “outperform” rating for the company. Stephens initiated coverage on Netflix in a research note on Friday, July 17th. They issued an “overweight” rating on the stock. Finally, HSBC cut Netflix from a “buy” rating to a “hold” rating and lowered their price objective for the company from $96.00 to $76.00 in a research report on Tuesday, September 22nd. Four equities research analysts have rated the stock with a Strong Buy rating, thirty-four have issued a Buy rating, fifteen have issued a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $93.82.

Insider Activity

In related news, CFO Spencer Neumann sold 9,248 shares of the company’s stock in a transaction on Monday, August 10th. The shares were sold at an average price of $75.79, for a total transaction of $700,905.92. Following the completion of the transaction, the chief financial officer owned 73,787 shares in the company, valued at approximately $5,592,316.73. This represents a 11.14% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, insider David A. Hyman sold 5,723 shares of the company’s stock in a transaction on Tuesday, August 4th. The stock was sold at an average price of $72.85, for a total transaction of $416,920.55. Following the transaction, the insider owned 316,100 shares of the company’s stock, valued at approximately $23,027,885. This represents a 1.78% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last 90 days, insiders have sold 179,045 shares of company stock valued at $13,132,194. Company insiders own 1.24% of the company’s stock.

Key Headlines Impacting Netflix

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Jefferies upgraded Netflix (NFLX) to “strong buy,” citing potential support from pricing increases and advertising revenue, while maintaining an $85 price target. Netflix stock gets bullish analyst call ahead of next week’s earnings
• Positive Sentiment: Netflix appointed former Disney and Fox executive Peter Rice as chief content officer, potentially bringing new strategic direction and industry experience as the company seeks stronger film and television hits. Netflix names former Disney executive Rice as new content chief
• Neutral Sentiment: Netflix reports third-quarter results after the market closes on October 20. Options markets imply a potentially large post-earnings move, increasing near-term volatility as investors assess revenue growth, churn and management’s outlook. Netflix will report earnings on Oct. 20
• Negative Sentiment: Netflix is eliminating roughly 1,000 jobs, or 6% of its workforce, in its largest reduction since 2022. Although the move may lower costs, its timing highlights management’s concerns about slowing growth and intensifying competition. Netflix is laying off roughly 6% of its workforce
• Negative Sentiment: Investors viewed the replacement of longtime content chief Bela Bajaria immediately after the layoffs as evidence of pressure to improve Netflix’s programming, particularly as viewer engagement slows and reported U.S. app churn rises. Netflix stock falls as content shake-up fails to ease investor worries
• Negative Sentiment: Wedbush lowered its price target from $105 to $90, while Rosenblatt reaffirmed a neutral rating with a $75 target. Analysts remain divided over whether Netflix’s still-positive revenue growth can offset weaker engagement and churn concerns.

Institutional Trading of Netflix

Hedge funds have recently bought and sold shares of the stock. American Capital Advisory LLC boosted its holdings in shares of Netflix by 0.8% in the first quarter. American Capital Advisory LLC now owns 13,990 shares of the Internet television network’s stock valued at $1,345,000 after purchasing an additional 109 shares during the period. CWS Financial Advisors LLC grew its stake in Netflix by 3.2% in the first quarter. CWS Financial Advisors LLC now owns 3,612 shares of the Internet television network’s stock valued at $347,000 after purchasing an additional 112 shares during the last quarter. Warner Group LLC raised its stake in shares of Netflix by 2.2% during the 1st quarter. Warner Group LLC now owns 5,230 shares of the Internet television network’s stock worth $503,000 after acquiring an additional 114 shares in the last quarter. Financial Avengers Inc. increased its position in shares of Netflix by 9.8% during the first quarter. Financial Avengers Inc. now owns 1,290 shares of the Internet television network’s stock worth $124,000 after purchasing an additional 115 shares in the last quarter. Finally, PAX Financial Group LLC boosted its position in shares of Netflix by 2.5% in the 1st quarter. PAX Financial Group LLC now owns 4,847 shares of the Internet television network’s stock worth $466,000 after purchasing an additional 116 shares in the last quarter. Hedge funds and other institutional investors own 80.93% of the company’s stock.

Netflix Price Performance

The company has a current ratio of 1.14, a quick ratio of 1.14 and a debt-to-equity ratio of 0.39. The stock has a market cap of $295.44 billion, a price-to-earnings ratio of 22.35, a PEG ratio of 1.00 and a beta of 1.62. The stock has a 50-day moving average price of $75.25 and a two-hundred day moving average price of $80.73.

Netflix (NASDAQ:NFLX) last announced its quarterly earnings data on Thursday, July 16th. The Internet television network reported $0.80 earnings per share for the quarter, beating analysts’ consensus estimates of $0.79 by $0.01. Netflix had a net margin of 28.22% and a return on equity of 40.02%. The firm had revenue of $12.56 billion for the quarter, compared to analyst estimates of $12.58 billion. During the same period in the previous year, the company earned $0.72 earnings per share. The business’s quarterly revenue was up 13.4% compared to the same quarter last year. As a group, equities research analysts forecast that Netflix, Inc. will post 3.59 EPS for the current year.

Netflix Company Profile

Netflix, Inc (NASDAQ:NFLX) is a global entertainment company that operates a subscription-based streaming service. It offers a broad range of television series, films, documentaries, and other programming, including original productions developed under the Netflix brand and licensed content from third-party studios.

The company also provides advertising-supported viewing options in some markets and has expanded into related entertainment categories, including mobile and cloud-based games, live programming, and consumer products associated with selected titles.