Netflix (NASDAQ:NFLX) Shares Down 1.4% – Here’s Why

Netflix, Inc. (NASDAQ:NFLX) traded down 1.4% on Thursday . The company traded as low as $75.30 and last traded at $75.31. Approximately 27,720,627 shares changed hands during trading, a decline of 35% from the average session volume of 42,622,609 shares. The stock had previously closed at $76.41.

Netflix News Summary

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Some analysts and investors remain constructive. Evercore reportedly views the selloff as a potential entry point, while Bill Ackman’s Pershing Square recently established a Netflix position. Supporters point to Netflix’s expanding advertising business, aggressive share repurchases and history of recovering from major downturns. Evercore wants investors to buy Netflix stock
• Positive Sentiment: Netflix continues to pursue growth through advertising, live events, sports and international programming. The company also signed a new global original-content production agreement with Studio Dragon, which could expand its content pipeline. Netflix live sports strategy
• Neutral Sentiment: Netflix joined Amazon and YouTube in forming the Streaming Access and Choice Alliance, a coalition seeking technology-neutral rules for streaming and live-sports distribution. The initiative may help shape future regulation but is unlikely to materially affect near-term results. Netflix joins streaming policy coalition
• Negative Sentiment: Wells Fargo analyst Steven Cahall said second-half viewership could decline about 4%, while viewing of Netflix’s Top 100 original titles may fall more than 20%. The bank warned that fewer breakout hits, rising churn risk and weaker engagement could pressure revenue growth, margins and the valuation multiple. Netflix downgraded by Wells Fargo
• Negative Sentiment: Coverage also highlights competitive concerns relative to Disney, whose diversified businesses, content slate and streaming profitability are viewed more favorably. Analysts argue Netflix needs another breakout franchise comparable to Squid Game and may be too focused on new formats and podcasts rather than must-watch programming. Netflix and Disney streaming competition

Wall Street Analyst Weigh In

A number of equities research analysts have recently issued reports on NFLX shares. Evercore restated an “outperform” rating and issued a $110.00 target price (up from $100.00) on shares of Netflix in a research note on Monday. President Capital decreased their price objective on Netflix from $134.00 to $83.00 and set a “buy” rating for the company in a report on Monday, July 20th. CICC Research reduced their price objective on shares of Netflix from $110.00 to $90.00 and set an “outperform” rating for the company in a report on Tuesday, July 21st. Seaport Research Partners cut Netflix from a “buy” rating to a “neutral” rating in a report on Monday, July 20th. Finally, Barclays decreased their target price on Netflix from $85.00 to $80.00 and set an “equal weight” rating for the company in a research note on Friday, July 17th. Four investment analysts have rated the stock with a Strong Buy rating, thirty-four have given a Buy rating, fifteen have issued a Hold rating and two have issued a Sell rating to the stock. According to MarketBeat.com, Netflix has an average rating of “Moderate Buy” and a consensus price target of $95.99.

Netflix Stock Down 4.7%

The company has a debt-to-equity ratio of 0.39, a quick ratio of 1.14 and a current ratio of 1.14. The stock has a market cap of $298.93 billion, a price-to-earnings ratio of 22.60, a price-to-earnings-growth ratio of 1.06 and a beta of 1.53. The business’s 50 day moving average is $75.81 and its 200 day moving average is $84.13.

Netflix (NASDAQ:NFLX) last released its earnings results on Thursday, July 16th. The Internet television network reported $0.80 earnings per share for the quarter, beating the consensus estimate of $0.79 by $0.01. The company had revenue of $12.56 billion for the quarter, compared to analysts’ expectations of $12.58 billion. Netflix had a return on equity of 40.02% and a net margin of 28.22%.The business’s revenue for the quarter was up 13.4% on a year-over-year basis. During the same quarter in the previous year, the business posted $0.72 EPS. Equities analysts expect that Netflix, Inc. will post 3.59 earnings per share for the current year.

Insider Buying and Selling at Netflix

In other Netflix news, Director Richard Barton sold 2,160 shares of the company’s stock in a transaction dated Wednesday, August 5th. The stock was sold at an average price of $75.10, for a total value of $162,216.00. Following the transaction, the director directly owned 246 shares of the company’s stock, valued at $18,474.60. This represents a 89.78% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Spencer Neumann sold 9,248 shares of the firm’s stock in a transaction dated Monday, August 10th. The stock was sold at an average price of $75.79, for a total value of $700,905.92. Following the sale, the chief financial officer directly owned 73,787 shares of the company’s stock, valued at $5,592,316.73. This trade represents a 11.14% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 179,045 shares of company stock worth $13,132,194 over the last 90 days. 1.24% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Netflix

Several institutional investors have recently bought and sold shares of the stock. Cornerstone Financial Management LLC bought a new stake in Netflix during the fourth quarter worth approximately $26,000. Clal Insurance Enterprises Holdings Ltd bought a new position in shares of Netflix in the second quarter valued at approximately $26,000. Lloyd Advisory Services LLC. acquired a new stake in shares of Netflix in the fourth quarter worth $28,000. Core Wealth Advisors LLC bought a new stake in shares of Netflix during the 4th quarter worth $28,000. Finally, Evolution Wealth Management Inc. raised its holdings in Netflix by 2,284.6% in the 4th quarter. Evolution Wealth Management Inc. now owns 310 shares of the Internet television network’s stock worth $29,000 after acquiring an additional 297 shares during the period. 80.93% of the stock is currently owned by institutional investors.

Netflix Company Profile

Netflix, Inc (NASDAQ:NFLX) is a global entertainment company that provides subscription-based streaming access to television series, films, documentaries and other video content. Its service includes Netflix-produced and licensed programming, with offerings that may vary by market. The company also provides an advertising-supported plan in selected countries and has expanded into mobile games and other interactive entertainment.

Netflix was founded in 1997 by Reed Hastings and Marc Randolph as a DVD-by-mail rental service in the United States.