Netflix (NASDAQ:NFLX) Shares Down 1.7% – Here’s Why

Netflix, Inc. (NASDAQ:NFLX)’s stock price fell 1.7% on Tuesday. The stock traded as low as $68.20 and last traded at $68.69. Approximately 59,364,441 shares traded hands during mid-day trading, an increase of 41% from the average session volume of 42,235,500 shares. The stock had previously closed at $69.85.

Netflix News Summary

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Netflix exceeded third-quarter earnings expectations, reporting diluted EPS of $0.87 versus an estimated $0.82, while revenue rose 12% year over year to $12.87 billion. Net income increased approximately 44% to $3.66 billion, and operating margin expanded to 34.6%. Netflix Q3 earnings report
• Positive Sentiment: Some analysts view the selloff as a potential buying opportunity because Netflix remains highly profitable, continues to grow faster than many streaming peers, and trades at a historically lower forward valuation. BMO, TD Cowen, UBS, JPMorgan and other firms maintained constructive ratings, although most lowered their price targets. Netflix sell-off buying opportunity
• Neutral Sentiment: Management said pricing, advertising, original programming and live events can support double-digit revenue growth into 2027. It also acknowledged that U.S. content execution and viewing-hour growth need improvement amid competition from YouTube, TikTok and lower-cost streaming services. Netflix earnings call analysis
• Negative Sentiment: The principal catalyst for the decline was weak guidance. Netflix projected fourth-quarter revenue of approximately $13.4 billion, below the roughly $13.5 billion consensus, and EPS of $0.67 versus expectations near $0.73. Full-year revenue guidance was slightly reduced to $51.1 billion, while fourth-quarter growth is expected to slow for a fourth consecutive quarter. Netflix weak fourth-quarter forecast
• Negative Sentiment: Netflix cut its 2026 advertising-revenue forecast from about $3.0 billion to $2.7 billion because advertising-product rollouts are slower than expected. The company also lowered its free-cash-flow outlook, while modest viewing-hour growth and recent content-leadership changes raised concerns that the company lacks a near-term breakout hit. Netflix advertising revenue forecast

Analysts Set New Price Targets

NFLX has been the subject of a number of research reports. CLSA started coverage on shares of Netflix in a report on Monday, July 20th. They issued an “outperform” rating for the company. Deutsche Bank Aktiengesellschaft set a $93.00 price target on shares of Netflix in a research note on Wednesday. Barclays set a $65.00 price target on shares of Netflix and gave the company an “equal weight” rating in a report on Wednesday. Jefferies Financial Group set a $85.00 price objective on shares of Netflix and gave the stock a “buy” rating in a research report on Thursday, October 15th. Finally, Rothschild & Co Redburn lowered their price objective on shares of Netflix from $120.00 to $93.00 and set a “buy” rating for the company in a research report on Tuesday, July 21st. Three research analysts have rated the stock with a Strong Buy rating, thirty-four have assigned a Buy rating, seventeen have given a Hold rating and two have given a Sell rating to the company. According to MarketBeat, the company currently has a consensus rating of “Moderate Buy” and an average price target of $89.94.

Netflix Stock Down 5.3%

The stock has a 50 day moving average price of $74.74 and a 200 day moving average price of $79.96. The stock has a market capitalization of $270.82 billion, a price-to-earnings ratio of 18.80, a price-to-earnings-growth ratio of 0.97 and a beta of 1.62. The company has a quick ratio of 1.14, a current ratio of 1.14 and a debt-to-equity ratio of 0.39.

Netflix (NASDAQ:NFLX) last released 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 return on equity of 42.69% and a net margin of 29.69%. The company had revenue of $12.87 billion for the quarter, compared to analysts’ expectations of $12.87 billion. During the same period in the previous year, the business posted $0.59 earnings per share. The business’s quarterly revenue was up 11.9% compared to the same quarter last year. As a group, analysts forecast that Netflix, Inc. will post 3.59 EPS for the current year.

Insider Buying and Selling at Netflix

In other Netflix news, CEO Gregory Peters sold 27,312 shares of the business’s stock in a transaction that occurred on Thursday, August 6th. The shares were sold at an average price of $73.54, for a total transaction of $2,008,524.48. Following the sale, the chief executive officer directly owned 120,931 shares of the company’s stock, valued at $8,893,265.74. The trade was a 18.42% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, CFO Spencer Neumann sold 9,248 shares of the company’s stock in a transaction that occurred 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 of the company’s stock, valued at approximately $5,592,316.73. This trade represents a 11.14% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 179,045 shares of company stock worth $13,132,194 over the last quarter. Insiders own 1.24% of the company’s stock.

Institutional Trading of Netflix

Several institutional investors have recently modified their holdings of NFLX. NBT Bank N.A. acquired a new stake in Netflix in the third quarter valued at $3,134,000. Root Financial Partners LLC grew its position in shares of Netflix by 12.3% in the 3rd quarter. Root Financial Partners LLC now owns 24,307 shares of the Internet television network’s stock valued at $1,691,000 after buying an additional 2,671 shares during the last quarter. Precedent Wealth Partners LLC increased its stake in shares of Netflix by 89.7% in the third quarter. Precedent Wealth Partners LLC now owns 6,088 shares of the Internet television network’s stock valued at $424,000 after buying an additional 2,878 shares during the period. JSF Financial LLC lifted its stake in shares of Netflix by 26.9% in the third quarter. JSF Financial LLC now owns 9,436 shares of the Internet television network’s stock worth $657,000 after acquiring an additional 2,003 shares during the period. Finally, SBI Securities Co. Ltd. lifted its stake in shares of Netflix by 18.3% in the third quarter. SBI Securities Co. Ltd. now owns 197,813 shares of the Internet television network’s stock worth $13,764,000 after acquiring an additional 30,611 shares during the period. Institutional investors own 80.93% of the company’s stock.

About Netflix

Netflix, Inc (NASDAQ:NFLX) is a global entertainment company that provides subscription-based streaming services. Its platform offers a broad selection of television series, films, documentaries, stand-up specials and other programming, including content produced by Netflix and licensed from third-party studios and creators.

The company also develops and distributes original productions under the Netflix brand and has expanded into additional entertainment offerings, including mobile and cloud-based games in select markets and live programming.