Netflix (NASDAQ:NFLX) Shares Down 7.3% Following Analyst Downgrade

Shares of Netflix, Inc. (NASDAQ:NFLX) dropped 7.3% during trading on Friday after JPMorgan Chase & Co. lowered their price target on the stock from $118.00 to $85.00. JPMorgan Chase & Co. currently has an overweight rating on the stock. Netflix traded as low as $65.08 and last traded at $68.95. Approximately 141,335,396 shares traded hands during trading, an increase of 208% from the average session volume of 45,892,918 shares. The stock had previously closed at $74.35.

A number of other brokerages have also issued reports on NFLX. Bank of America reaffirmed a “buy” rating and set a $125.00 target price on shares of Netflix in a research report on Monday, May 18th. KGI Securities downgraded shares of Netflix from an “outperform” rating to a “neutral” rating and set a $75.00 price target for the company. in a report on Friday. Morgan Stanley restated an “overweight” rating and issued a $90.00 price target (down from $115.00) on shares of Netflix in a research report on Tuesday. Seaport Research Partners boosted their price objective on shares of Netflix from $115.00 to $119.00 and gave the stock a “buy” rating in a report on Friday, April 17th. Finally, New Street Research upped their price objective on shares of Netflix from $96.00 to $102.00 in a research report on Friday, April 17th. Two investment analysts have rated the stock with a Strong Buy rating, thirty-five have assigned a Buy rating and sixteen have given a Hold rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average price target of $103.97.

Insider Buying and Selling

In related news, CEO Gregory K. Peters sold 27,312 shares of the stock in a transaction that occurred on Thursday, May 7th. The stock was sold at an average price of $88.69, for a total transaction of $2,422,301.28. Following the sale, the chief executive officer directly owned 120,931 shares in the company, valued at $10,725,370.39. This represents a 18.42% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Bradford L. Smith sold 35,990 shares of the stock in a transaction that occurred on Wednesday, June 17th. The stock was sold at an average price of $77.52, for a total value of $2,789,944.80. Following the sale, the director owned 79,690 shares in the company, valued at approximately $6,177,568.80. This trade represents a 31.11% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 899,839 shares of company stock worth $80,141,661. Insiders own 1.24% of the company’s stock.

Key Netflix News

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Some analysts remain bullish, arguing Netflix still has strong long-term upside from margin expansion, advertising growth, and new engagement-driven content formats. Mark Mahaney Reiterates Buy on Netflix
• Positive Sentiment: Supportive commentary highlighted Netflix’s AI, ads, short-form video, and gaming strategy as potential growth catalysts for monetization and engagement. Ad Engagement & Content Opportunities Offer Bullish Edge for NFLX
• Neutral Sentiment: Several analysts cut price targets but mostly kept buy/overweight or hold ratings, signaling lower near-term expectations rather than a full thesis break. Laura Martin Maintains Buy on Netflix
• Negative Sentiment: Netflix’s weaker Q3 outlook and reduced engagement disclosure sparked concern that growth is slowing and management is becoming less transparent with investors. Netflix third-quarter earnings forecast falls shy of Wall Street expectations
• Negative Sentiment: Coverage across the market emphasized the post-earnings selloff, citing a revenue miss, soft guidance, and investor worries about future growth and competition. U.S. Chip Stocks Extend Slide; Netflix Tumbles on Growth Warning

Institutional Trading of Netflix

Several large investors have recently made changes to their positions in NFLX. Vanguard Group Inc. lifted its position in Netflix by 912.5% during the 4th quarter. Vanguard Group Inc. now owns 390,014,981 shares of the Internet television network’s stock worth $36,567,805,000 after buying an additional 351,493,659 shares in the last quarter. State Street Corp increased its position in Netflix by 927.6% in the 4th quarter. State Street Corp now owns 176,780,995 shares of the Internet television network’s stock valued at $16,574,986,000 after acquiring an additional 159,578,053 shares in the last quarter. Geode Capital Management LLC increased its position in Netflix by 892.0% in the 4th quarter. Geode Capital Management LLC now owns 99,598,678 shares of the Internet television network’s stock valued at $9,305,336,000 after acquiring an additional 89,558,684 shares in the last quarter. Capital World Investors raised its stake in shares of Netflix by 859.1% in the fourth quarter. Capital World Investors now owns 89,341,444 shares of the Internet television network’s stock worth $8,376,656,000 after acquiring an additional 80,025,890 shares during the last quarter. Finally, Price T Rowe Associates Inc. MD raised its stake in shares of Netflix by 685.8% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 86,058,878 shares of the Internet television network’s stock worth $8,068,882,000 after acquiring an additional 75,107,069 shares during the last quarter. Institutional investors own 80.93% of the company’s stock.

Netflix Stock Performance

The stock’s 50 day simple moving average is $80.15 and its two-hundred day simple moving average is $86.90. The company has a market capitalization of $290.33 billion, a P/E ratio of 21.70, a P/E/G ratio of 0.88 and a beta of 1.52. The company has a debt-to-equity ratio of 0.43, a current ratio of 1.41 and a quick ratio of 1.41.

Netflix (NASDAQ:NFLX) last released its quarterly earnings results on Thursday, July 16th. The Internet television network reported $0.80 EPS for the quarter, beating the consensus estimate of $0.79 by $0.01. The business had revenue of $12.56 billion for the quarter, compared to analysts’ expectations of $12.58 billion. Netflix had a net margin of 28.22% and a return on equity of 40.83%. Netflix’s revenue was up 13.4% compared to the same quarter last year. During the same period in the prior year, the firm earned $0.72 earnings per share. As a group, research analysts expect that Netflix, Inc. will post 3.6 earnings per share for the current year.

About Netflix

Netflix, Inc (NASDAQ: NFLX) is a global entertainment company that provides subscription-based streaming of films, television series, documentaries and other video content. Founded in 1997 by Reed Hastings and Marc Randolph and headquartered in Los Gatos, California, the company began as a DVD-by-mail rental service and introduced streaming video in 2007. Netflix later expanded into producing and distributing original programming, beginning notable original hits in the 2010s, and now operates a content production and distribution ecosystem alongside its licensing activity.

The company’s primary product is its on-demand streaming service, which can be accessed on a wide range of internet-connected devices and delivered through a suite of apps and web platforms.