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

Netflix, Inc. (NASDAQ:NFLX) gapped down before the market opened 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 trading hands.

A number of other research firms have also recently commented on NFLX. Robert W. Baird set a $90.00 price target on shares of Netflix and gave the company an “outperform” rating in a report on Wednesday, July 22nd. Piper Sandler restated an “overweight” rating and issued a $85.00 price objective (down from $115.00) on shares of Netflix in a report on Friday, July 17th. Huber Research lowered shares of Netflix from a “buy” rating to an “underweight” rating in a report on Tuesday. Oppenheimer set a $85.00 price objective on Netflix and gave the company an “outperform” rating in a research report on Friday, July 17th. Finally, Bank of America cut their target price on Netflix from $125.00 to $105.00 and set a “buy” rating on the stock in a research note on Friday, July 17th. Four 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 issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and a consensus price target of $93.82.

Insider Transactions at Netflix

In related news, CEO Theodore Sarandos sold 105,850 shares of Netflix stock in a transaction on Monday, August 3rd. The stock was sold at an average price of $73.03, for a total value of $7,730,225.50. Following the completion of the sale, the chief executive officer owned 206,266 shares of the company’s stock, valued at $15,063,605.98. The trade was a 33.91% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Gregory Peters sold 27,312 shares of Netflix stock in a transaction 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 of the company’s stock, valued at $8,893,265.74. The trade was a 18.42% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders sold 179,045 shares of company stock worth $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 Investors Weigh In On Netflix

A number of large investors have recently made changes to their positions in the company. Clal Insurance Enterprises Holdings Ltd bought a new position in shares of Netflix in the 2nd quarter worth approximately $26,000. Compound Global Advisors LLC purchased a new position in shares of Netflix in the second quarter worth approximately $29,000. Burnham & Co LLC purchased a new position in shares of Netflix in the second quarter worth approximately $29,000. Merkkuri Wealth Advisors LLC bought a new stake in Netflix during the first quarter valued at approximately $31,000. Finally, Bayban grew its position in Netflix by 400.0% during the first quarter. Bayban now owns 350 shares of the Internet television network’s stock valued at $34,000 after buying an additional 280 shares during the period. 80.93% of the stock is currently owned by institutional investors.

Netflix Price Performance

The company has a market capitalization of $295.44 billion, a P/E ratio of 22.35, a price-to-earnings-growth ratio of 1.00 and a beta of 1.62. The company has a debt-to-equity ratio of 0.39, a current ratio of 1.14 and a quick ratio of 1.14. The firm’s 50-day moving average is $75.25 and its 200-day moving average is $80.73.

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