Netflix (NASDAQ:NFLX) Shares Up 4.7% – Still a Buy?

Netflix, Inc. (NASDAQ:NFLX)’s stock price traded up 4.7% during trading on Wednesday. The stock traded as high as $66.78 and last traded at $66.39. Approximately 49,502,511 shares traded hands during trading, an increase of 16% from the average session volume of 42,782,328 shares. The stock had previously closed at $63.42.

Trending Headlines about Netflix

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Netflix ordered Other Worlds: A Stranger Things Adventure, a live-action prequel series. Extending a popular franchise could support viewer engagement, though the financial impact and timing are not yet clear. Article: Stranger Things prequel series
• Positive Sentiment: A valuation analysis argues NFLX could be undervalued, estimating about 23% upside to fair value. This offers a counterpoint to recent weakness, but is an analyst view rather than a company announcement. Article: Netflix stock fair-value analysis
• Neutral Sentiment: CEO Ted Sarandos and CFO Spencer Neumann disclosed share sales, but the transactions were made to cover tax withholding on vested equity awards. That stated purpose makes them a less clear signal about management’s view of the stock. Article: Netflix insider share sales
• Negative Sentiment: Coverage noted NFLX slipping even with the new Stranger Things plans, suggesting the content announcement has not eased near-term selling pressure. The shares are also near their 52-week low and far below their 52-week high, reflecting a weak recent trend. Article: Netflix stock slips despite new Stranger Things plans

Wall Street Analysts Forecast Growth

NFLX has been the subject of several recent analyst reports. Jefferies Financial Group set a $85.00 price target on Netflix and gave the stock a “buy” rating in a report on Thursday, October 15th. William Blair reaffirmed an “outperform” rating on shares of Netflix in a report on Wednesday, October 21st. Citizens Jmp reaffirmed a “market perform” rating on shares of Netflix in a research report on Wednesday, October 21st. Seaport Research Partners set a $85.00 price target on Netflix in a report on Wednesday, October 21st. Finally, CLSA began coverage on Netflix in a research report on Monday, July 20th. They set an “outperform” rating for the company. Two investment analysts have rated the stock with a Strong Buy rating, thirty-five have issued a Buy rating, seventeen have assigned a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat.com, Netflix has a consensus rating of “Moderate Buy” and a consensus price target of $89.14.

Netflix Trading Down 3.3%

The firm’s 50-day simple moving average is $71.03 and its 200-day simple moving average is $80.97. The company has a quick ratio of 1.07, a current ratio of 1.07 and a debt-to-equity ratio of 0.43. The firm has a market capitalization of $260.38 billion, a P/E ratio of 18.33, a price-to-earnings-growth ratio of 0.97 and a beta of 1.62.

Netflix (NASDAQ:NFLX) last posted its quarterly earnings results on Tuesday, October 20th. The Internet television network reported $0.87 earnings per share for the quarter, topping the consensus estimate of $0.82 by $0.05. Netflix had a net margin of 29.69% and a return on equity of 42.69%. The business had revenue of $12.87 billion during the quarter, compared to the consensus estimate of $12.87 billion. During the same period in the previous year, the firm posted $0.59 earnings per share. The firm’s revenue for the quarter was up 11.9% on a year-over-year basis. Analysts anticipate that Netflix, Inc. will post 3.59 EPS for the current year.

Insider Transactions at Netflix

In related news, CFO Spencer Neumann sold 9,253 shares of Netflix stock in a transaction dated Wednesday, November 4th. The stock was sold at an average price of $66.15, for a total value of $612,085.95. Following the completion of the sale, the chief financial officer directly owned 73,787 shares in the company, valued at approximately $4,881,010.05. This trade represents a 11.14% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Theodore Sarandos sold 27,312 shares of the business’s stock in a transaction on Wednesday, November 4th. The shares were sold at an average price of $66.20, for a total transaction of $1,808,054.40. Following the sale, the chief executive officer owned 178,954 shares of the company’s stock, valued at approximately $11,846,754.80. This represents a 13.24% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last quarter, insiders have sold 70,960 shares of company stock valued at $4,752,050. 1.24% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently added to or reduced their stakes in NFLX. BlackRock Inc. purchased a new position in shares of Netflix in the second quarter valued at $24,902,221,000. State Street Corp boosted its stake in shares of Netflix by 4.9% during the second quarter. State Street Corp now owns 180,129,582 shares of the Internet television network’s stock valued at $12,861,252,000 after purchasing an additional 8,474,820 shares during the period. Bank of America Corp DE boosted its position in Netflix by 4.3% in the 1st quarter. Bank of America Corp DE now owns 57,942,812 shares of the Internet television network’s stock valued at $5,571,201,000 after buying an additional 2,376,349 shares during the period. Bank of New York Mellon Corp bought a new stake in Netflix during the 2nd quarter valued at $1,906,482,000. Finally, Legal & General Group Plc bought a new position in Netflix in the second quarter worth approximately $1,886,526,000. 80.93% of the stock is currently owned by institutional investors.

Netflix Company Profile

Netflix, Inc is an entertainment company that offers subscription-based streaming of television series, films, documentaries and other programming. Its service also includes mobile games and, in some markets, advertising-supported viewing plans. Netflix produces and licenses content, including titles made under its Netflix brand.

Founded in 1997 by Reed Hastings and Marc Randolph as a DVD-by-mail rental business, the company launched its streaming service in 2007 and later expanded into original programming.