Netflix (NASDAQ:NFLX) Shares Down 2.9% on Analyst Downgrade

Shares of Netflix, Inc. (NASDAQ:NFLX) dropped 2.9% during trading on Friday after Wedbush lowered their price target on the stock from $105.00 to $90.00. Wedbush currently has an outperform rating on the stock. Netflix traded as low as $69.76 and last traded at $70.53. 40,500,050 shares traded hands during trading, a decline of 4% from the average session volume of 42,250,168 shares. The stock had previously closed at $72.61.

NFLX has been the topic of several other reports. Huber Research cut Netflix from a “buy” rating to an “underweight” rating in a report on Tuesday. KGI Securities cut Netflix from an “outperform” rating to a “neutral” rating and set a $75.00 target price for the company. in a report on Friday, July 17th. KeyCorp decreased their target price on Netflix from $92.00 to $85.00 and set an “overweight” rating on the stock in a research report on Tuesday. Rosenblatt Securities restated a “neutral” rating and issued a $75.00 target price on shares of Netflix in a research report on Friday. Finally, HSBC lowered Netflix from a “buy” rating to a “hold” rating and lowered their price target for the stock from $96.00 to $76.00 in a research note on Tuesday, September 22nd. Four equities research analysts have rated the stock with a Strong Buy rating, thirty-four have given a Buy rating, fifteen have given a Hold rating and two have assigned a Sell rating to the company’s stock. According to data from MarketBeat, Netflix has a consensus rating of “Moderate Buy” and a consensus target price of $93.82.

Insiders Place Their Bets

In other news, CEO Gregory K. Peters sold 27,312 shares of the company’s stock in a transaction that occurred on Thursday, August 6th. The stock was sold at an average price of $73.54, for a total value of $2,008,524.48. Following the completion of the sale, the chief executive officer directly owned 120,931 shares in the company, valued at $8,893,265.74. This represents a 18.42% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, Director Richard N. Barton sold 2,160 shares of the company’s stock in a transaction that occurred on Wednesday, August 5th. The shares were sold at an average price of $75.10, for a total value of $162,216.00. Following the completion of the sale, the director owned 246 shares of the company’s stock, valued at $18,474.60. This trade represents a 89.78% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders sold 179,045 shares of company stock worth $13,132,194. 1.24% of the stock is currently owned by insiders.

Netflix News Roundup

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Former Disney and Fox executive Peter Rice will become Netflix’s chief content officer on October 26, replacing Bela Bajaria. Rice’s experience across scripted and unscripted programming, live sports, prestige television and theatrical distribution could help Netflix develop stronger content and improve engagement over time. Here’s who Netflix just brought in to run content
• Positive Sentiment: Analyst support provides a counterweight to the selling. Jefferies upgraded Netflix to “strong buy” and has cited pricing power and advertising growth as potential revenue drivers, while Wedbush maintained an “outperform” rating with a $90 price target. Options activity is also described as bullish ahead of earnings. Netflix stock gets bullish analyst call
• Neutral Sentiment: Netflix reports third-quarter results after the market closes on October 20. Investors will watch revenue growth, advertising commitments, margins, subscriber trends and management’s outlook; options traders expect a potentially large post-earnings move. Netflix earnings options outlook
• Negative Sentiment: The leadership change is being interpreted as evidence that Netflix’s content strategy needs a reset. Bajaria’s departure comes after nearly a decade with the company and immediately follows Netflix’s announcement that it will eliminate about 1,000 jobs, or 6% of its workforce. The timing, just before earnings, is increasing investor uncertainty. Netflix shares under pressure as chief content officer departs
• Negative Sentiment: Investors remain concerned about slowing viewer engagement, rising churn and intensifying streaming competition. Analysts note that pricing and advertising may support revenue, but slower viewership growth and Netflix’s premium valuation leave little room for disappointing guidance. Netflix prepares for third-quarter earnings

Hedge Funds Weigh In On Netflix

A number of institutional investors and hedge funds have recently added to or reduced their stakes in NFLX. BlackRock Inc. acquired a new stake in shares of Netflix in the 2nd quarter worth $24,902,221,000. State Street Corp raised its holdings in shares of Netflix by 4.9% during the 2nd quarter. State Street Corp now owns 180,129,582 shares of the Internet television network’s stock worth $12,861,252,000 after acquiring an additional 8,474,820 shares during the period. Bank of America Corp DE raised its holdings in shares of Netflix by 4.3% during the 1st quarter. Bank of America Corp DE now owns 57,942,812 shares of the Internet television network’s stock worth $5,571,201,000 after acquiring an additional 2,376,349 shares during the period. Invesco Ltd. boosted its position in shares of Netflix by 835.9% during the 4th quarter. Invesco Ltd. now owns 43,462,696 shares of the Internet television network’s stock valued at $4,075,062,000 after acquiring an additional 38,818,947 shares during the last quarter. Finally, Bank of New York Mellon Corp acquired a new position in shares of Netflix during the 2nd quarter valued at about $1,906,482,000. Institutional investors and hedge funds own 80.93% of the company’s stock.

Netflix Trading Down 2.9%

The stock has a market capitalization of $293.68 billion, a price-to-earnings ratio of 22.20, a PEG ratio of 1.00 and a beta of 1.62. The company’s 50-day moving average is $75.25 and its 200-day moving average is $80.73. 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 posted 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 analyst estimates of $12.58 billion. Netflix had a net margin of 28.22% and a return on equity of 40.02%. Netflix’s revenue was up 13.4% on a year-over-year basis. During the same period in the previous year, the business posted $0.72 EPS. Research analysts anticipate that Netflix, Inc. will post 3.59 earnings per share for the current fiscal year.

About Netflix

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.