Prospect Hill Management LLC Takes Position in Netflix, Inc. $NFLX

Key Points

• Prospect Hill Management initiated a Netflix position of 63,514 shares worth approximately $4.54 million, making Netflix its ninth-largest holding and 1.8% of its portfolio.
• Netflix reported quarterly EPS of $0.80, slightly above estimates, while revenue rose 13.4% year over year to $12.56 billion; net margin was 28.22% and return on equity reached 40.02%.
• Analyst sentiment remains broadly positive, with a “Moderate Buy” consensus and an average price target of $103.48, although some firms recently lowered targets. Insiders sold roughly $49.1 million of stock over the past 90 days.

Prospect Hill Management LLC bought a new stake in Netflix, Inc. (NASDAQ:NFLX - Free Report) in the second quarter, according to its most recent Form 13F filing with the SEC. The institutional investor bought 63,514 shares of the Internet television network's stock, valued at approximately $4,535,000. Netflix accounts for about 1.8% of Prospect Hill Management LLC's investment portfolio, making the stock its 9th biggest position.

A number of other hedge funds have also recently added to or reduced their stakes in the company. Vanguard Group Inc. boosted its holdings in shares of Netflix by 912.5% in the fourth quarter. Vanguard Group Inc. now owns 390,014,981 shares of the Internet television network's stock valued at $36,567,805,000 after acquiring an additional 351,493,659 shares during the period. State Street Corp grew its position in shares of Netflix by 927.6% during the fourth quarter. State Street Corp now owns 176,780,995 shares of the Internet television network's stock worth $16,574,986,000 after acquiring an additional 159,578,053 shares during the last quarter. Geode Capital Management LLC grew its position in shares of Netflix by 892.0% during the fourth quarter. Geode Capital Management LLC now owns 99,598,678 shares of the Internet television network's stock worth $9,305,336,000 after acquiring an additional 89,558,684 shares during the last quarter. Capital World Investors increased its holdings in shares of Netflix by 859.1% in the 4th quarter. Capital World Investors now owns 89,341,444 shares of the Internet television network's stock valued at $8,376,656,000 after acquiring an additional 80,025,890 shares during the period. Finally, Morgan Stanley increased its holdings in shares of Netflix by 903.0% in the 4th quarter. Morgan Stanley now owns 85,349,973 shares of the Internet television network's stock valued at $8,002,414,000 after acquiring an additional 76,840,318 shares during the period. Hedge funds and other institutional investors own 80.93% of the company's stock.

Netflix Stock Performance

Shares of NFLX opened at $78.16 on Friday. 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 capitalization of $325.45 billion, a P/E ratio of 24.60, a P/E/G ratio of 0.98 and a beta of 1.52. The company's fifty day moving average is $74.67 and its two-hundred day moving average is $84.54. Netflix, Inc. has a 1 year low of $65.08 and a 1 year high of $126.71.

Netflix (NASDAQ:NFLX - Get Free Report) last released its 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. The company had revenue of $12.56 billion during the quarter, compared to analysts' expectations of $12.58 billion. Netflix had a net margin of 28.22% and a return on equity of 40.02%. The business's revenue was up 13.4% on a year-over-year basis. During the same quarter last year, the business earned $0.72 EPS. On average, sell-side analysts predict that Netflix, Inc. will post 3.59 earnings per share for the current year.

Insider Activity

In related news, CFO Spencer Adam Neumann sold 9,248 shares of the firm's stock in a transaction dated Monday, August 10th. The shares were sold at an average price of $75.79, for a total value of $700,905.92. Following the completion of the sale, the chief financial officer owned 73,787 shares in the company, valued at $5,592,316.73. This trade represents a 11.14% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, Director Reed Hastings sold 386,700 shares of Netflix stock in a transaction that occurred on Monday, June 1st. The shares were sold at an average price of $85.97, for a total value of $33,244,599.00. Following the completion of the sale, the director directly owned 3,940 shares in the company, valued at $338,721.80. This represents a 98.99% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 600,295 shares of company stock valued at $49,056,671 over the last ninety days. 1.24% of the stock is currently owned by company insiders.

Analyst Upgrades and Downgrades

Several analysts recently commented on the stock. Pivotal Research reduced their price target on shares of Netflix from $96.00 to $70.00 and set a "hold" rating for the company in a research report on Friday, July 17th. Deutsche Bank Aktiengesellschaft set a $110.00 price objective on shares of Netflix in a research report on Monday, July 20th. Phillip Securities upgraded shares of Netflix from a "moderate buy" rating to a "strong-buy" rating in a research note on Sunday, July 19th. Wedbush reduced their target price on shares of Netflix from $118.00 to $105.00 and set an "outperform" rating for the company in a report on Friday, July 17th. Finally, Citigroup downgraded shares of Netflix from a "buy" rating to a "positive" rating in a research note on Monday, July 20th. Four equities research analysts have rated the stock with a Strong Buy rating, thirty-four have assigned a Buy rating, sixteen have issued a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average target price of $103.48.

Netflix News Roundup

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Bill Ackman’s Pershing Square disclosed a new Netflix position of approximately 3.15 million shares, representing about 4.9% of the fund’s portfolio. Ackman said Netflix has effectively “won the streaming wars,” renewing investor interest after the stock’s major sell-off. Reuters article
• Positive Sentiment: Analysts and investing commentators point to Netflix’s resilient fundamentals: second-quarter revenue rose 13.4% year over year to $12.6 billion, earnings per share slightly exceeded estimates, and profitability remained strong. The advertising business, expanding margins and a valuation viewed as reasonable relative to growth are supporting the bullish case. Zacks article
• Positive Sentiment: Netflix’s continued push into live sports—including an MLB “Field of Dreams” game—and the extension of its Seinfeld agreement could strengthen engagement, advertising opportunities and content retention. MLB live sports article
• Neutral Sentiment: Institutional positioning is mixed: some large investors added shares while others reduced holdings. Analysts’ reported price targets remain above the current market level, but investors still must weigh valuation and slowing growth expectations.
• Negative Sentiment: Netflix closed its Hollywood-based Night School gaming studio and plans to close Helsinki-based Moonloot. The closures may improve focus and reduce costs, but they also raise questions about the company’s gaming strategy and ability to expand beyond streaming. Los Angeles Times article
• Negative Sentiment: Reported insider trading shows 30 Netflix open-market sales and no purchases over the past six months. While such sales may reflect compensation or diversification, the one-sided pattern can weigh on sentiment and contrasts with Ackman’s new bullish position. Quiver Quantitative article

Netflix 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.

Want to see what other hedge funds are holding NFLX? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Netflix, Inc. (NASDAQ:NFLX - Free Report).

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