Netflix (NASDAQ:NFLX) Shares Down 2% Following Analyst Downgrade

Netflix, Inc. (NASDAQ:NFLX) shares dropped 2% during trading on Monday after Seaport Research Partners downgraded the stock from a buy rating to a neutral rating. The stock traded as low as $66.69 and last traded at $67.60. Approximately 60,421,264 shares were traded during mid-day trading, an increase of 31% from the average session volume of 46,003,379 shares. The stock had previously closed at $68.95.

NFLX has been the subject of several other reports. Morgan Stanley reaffirmed an “overweight” rating and set a $90.00 price objective (down from $115.00) on shares of Netflix in a research report on Tuesday, July 14th. Wells Fargo & Company set a $80.00 target price on Netflix and gave the company an “equal weight” rating in a research report on Friday. Guggenheim set a $75.00 target price on Netflix and gave the company a “buy” rating in a research note on Friday. KGI Securities downgraded Netflix from an “outperform” rating to a “neutral” rating and set a $75.00 price target for the company. in a research report on Friday. Finally, HSBC raised their price target on shares of Netflix from $106.00 to $114.00 and gave the stock a “buy” rating in a research note on Friday, April 10th. Three analysts have rated the stock with a Strong Buy rating, thirty-three have given a Buy rating, seventeen have issued a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and an average target price of $104.21.

Insider Buying and Selling at Netflix

In related news, Director Bradford L. Smith sold 35,990 shares of the company’s stock in a transaction dated Wednesday, June 17th. The stock was sold at an average price of $77.52, for a total transaction 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 represents a 31.11% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Gregory K. Peters sold 27,312 shares of the stock in a transaction that occurred on Thursday, May 7th. The shares were sold at an average price of $88.69, for a total value of $2,422,301.28. Following the transaction, the chief executive officer directly owned 120,931 shares of the company’s stock, valued at $10,725,370.39. This trade represents a 18.42% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 899,839 shares of company stock valued at $80,141,661 in the last ninety days. Insiders own 1.24% of the company’s stock.

Netflix News Roundup

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Netflix delivered an earnings beat and continues to post double-digit revenue growth, while bulls argue the selloff has made the stock look inexpensive on earnings and cash flow. Netflix “Is Not a Broken Company” and Trades At Just 19x Earnings. Jim Cramer Says Start Buying
• Positive Sentiment: Several analysts and commentators say the post-earnings drop may have created a buying opportunity, citing Netflix’s ad business, live content ambitions, international growth, and strong free-cash-flow potential. Netflix (NFLX) Stock Still Looks Cheap On Cash Flow And Earnings
• Positive Sentiment: Phillip Securities upgraded Netflix from “moderate buy” to “strong-buy,” with one analyst saying engagement shows no signs of slowing and setting a higher price target than the current trading level. Netflix, Inc. (NFLX) is Attracting Investor Attention: Here is What You Should Know
• Neutral Sentiment: Wall Street coverage remains active and largely mixed-to-bullish, with some reports pointing to meaningful upside in consensus price targets even after the recent slide. Netflix Fell 45% Over 12 Months But This Ratings House Sees A Doubling Share Price
• Negative Sentiment: Investors are worried about softer revenue guidance, slowing growth momentum, and Netflix making viewership metrics harder to track, which raises questions about transparency and future monetization. Netflix (NFLX) Could Be 18% Undervalued After Soft Guidance Raised Fresh Growth Questions
• Negative Sentiment: Multiple articles described the stock’s recent action as a sharp post-earnings crash or “miserable stretch,” reflecting concern that the latest quarter did not convince investors that growth will reaccelerate soon. Netflix just made its slowdown harder to measure

Hedge Funds Weigh In On Netflix

Institutional investors have recently added to or reduced their stakes in the company. Pacific Sun Financial Corp boosted its stake in shares of Netflix by 1.6% in the 3rd quarter. Pacific Sun Financial Corp now owns 574 shares of the Internet television network’s stock valued at $688,000 after buying an additional 9 shares during the period. Beaird Harris Wealth Management LLC grew its position in shares of Netflix by 9.6% during the third quarter. Beaird Harris Wealth Management LLC now owns 114 shares of the Internet television network’s stock worth $137,000 after buying an additional 10 shares in the last quarter. Monograph Wealth Advisors LLC increased its stake in shares of Netflix by 1.8% during the second quarter. Monograph Wealth Advisors LLC now owns 682 shares of the Internet television network’s stock worth $913,000 after buying an additional 12 shares during the period. Resources Management Corp CT ADV increased its stake in shares of Netflix by 2.0% during the second quarter. Resources Management Corp CT ADV now owns 829 shares of the Internet television network’s stock worth $1,110,000 after buying an additional 16 shares during the period. Finally, Sompo Asset Management Co. Ltd. raised its holdings in Netflix by 1.4% in the second quarter. Sompo Asset Management Co. Ltd. now owns 1,500 shares of the Internet television network’s stock valued at $2,009,000 after acquiring an additional 20 shares in the last quarter. 80.93% of the stock is currently owned by institutional investors and hedge funds.

Netflix Trading Up 1.6%

The company’s fifty day moving average is $79.42 and its two-hundred day moving average is $86.49. The stock has a market cap of $285.94 billion, a price-to-earnings ratio of 21.61, a PEG ratio of 0.85 and a beta of 1.52. The company has a quick ratio of 1.41, a current ratio of 1.14 and a debt-to-equity ratio of 0.39.

Netflix (NASDAQ:NFLX) last posted its quarterly earnings results on Thursday, July 16th. The Internet television network reported $0.80 EPS 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 company had revenue of $12.56 billion during the quarter, compared to analysts’ expectations of $12.58 billion. During the same quarter in the previous year, the business posted $0.72 EPS. The firm’s revenue was up 13.4% on a year-over-year basis. On average, research analysts predict that Netflix, Inc. will post 3.6 EPS for the current fiscal year.

Netflix Company Profile

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.