Netflix, Inc. (NASDAQ:NFLX) Receives Average Rating of "Moderate Buy" from Brokerages

Key Points

• Analyst consensus is “Moderate Buy”: Of 55 covering firms, 33 rate Netflix a buy, four a strong buy, 17 hold and one sell. The average 12-month price target is $103.48, compared with shares opening at $73.69.
• Netflix’s latest quarter showed adjusted earnings of $0.80 per share, narrowly beating estimates, while revenue rose 13.4% year over year to $12.56 billion but slightly missed expectations.
• Insiders sold heavily: Company insiders sold 591,047 shares worth roughly $48.4 million during the last quarter, while institutional investors own 80.93% of the stock.

Shares of Netflix, Inc. (NASDAQ:NFLX - Get Free Report) have been assigned an average rating of "Moderate Buy" from the fifty-five research firms that are covering the stock, Marketbeat Ratings reports. One investment analyst has rated the stock with a sell rating, seventeen have assigned a hold rating, thirty-three have issued a buy rating and four have assigned a strong buy rating to the company. The average twelve-month price objective among analysts that have covered the stock in the last year is $103.4829.

Several research analysts have recently weighed in on the company. Erste Group Bank cut Netflix from a "buy" rating to a "hold" rating in a research report on Monday, April 27th. HSBC lifted their target price on Netflix from $106.00 to $114.00 and gave the company a "buy" rating in a research report on Friday, April 10th. Citigroup cut Netflix from a "buy" rating to a "positive" rating in a research note on Monday, July 20th. China Renaissance upped their price target on Netflix from $90.00 to $100.00 and gave the stock a "hold" rating in a research report on Friday, April 17th. Finally, Moffett Nathanson decreased their price target on shares of Netflix from $120.00 to $115.00 and set a "buy" rating for the company in a research note on Wednesday, June 17th.

Netflix Stock Down 0.7%

Shares of NASDAQ:NFLX opened at $73.69 on Friday. 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 stock has a market cap of $306.84 billion, a price-to-earnings ratio of 23.19, a P/E/G ratio of 0.93 and a beta of 1.52. The company has a 50 day moving average of $75.56 and a 200-day moving average of $84.95. Netflix has a one year low of $65.08 and a one year high of $126.71.

Netflix (NASDAQ:NFLX - Get Free Report) last issued its 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. 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 company posted $0.72 EPS. The business's revenue for the quarter was up 13.4% compared to the same quarter last year. On average, sell-side analysts forecast that Netflix will post 3.59 earnings per share for the current year.

Insider Activity

In other news, Director Bradford L. Smith sold 35,990 shares of the company's stock in a transaction that occurred on 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 transaction, the director directly owned 79,690 shares of the company's stock, valued at $6,177,568.80. This represents a 31.11% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Theodore A. Sarandos sold 27,312 shares of Netflix stock in a transaction on Tuesday, August 4th. The shares were sold at an average price of $73.35, for a total value of $2,003,335.20. Following the sale, the chief executive officer directly owned 178,954 shares of the company's stock, valued at $13,126,275.90. This represents a 13.24% decrease in their position. The disclosure for this sale is available in the SEC filing. 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. In the last quarter, insiders sold 591,047 shares of company stock worth $48,355,766. 1.24% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several large investors have recently made changes to their positions in the business. Brighton Jones LLC boosted its holdings in shares of Netflix by 5.0% during the fourth quarter. Brighton Jones LLC now owns 5,390 shares of the Internet television network's stock worth $4,804,000 after purchasing an additional 257 shares during the period. Revolve Wealth Partners LLC increased its holdings in Netflix by 16.4% during the 4th quarter. Revolve Wealth Partners LLC now owns 1,023 shares of the Internet television network's stock valued at $912,000 after purchasing an additional 144 shares during the period. Sivia Capital Partners LLC increased its holdings in Netflix by 21.2% during the 2nd quarter. Sivia Capital Partners LLC now owns 1,406 shares of the Internet television network's stock valued at $1,883,000 after purchasing an additional 246 shares during the period. Strategic Investment Advisors MI raised its position in Netflix by 18.9% during the 2nd quarter. Strategic Investment Advisors MI now owns 774 shares of the Internet television network's stock valued at $1,036,000 after purchasing an additional 123 shares during the last quarter. Finally, Schnieders Capital Management LLC. raised its position in Netflix by 12.1% during the 2nd quarter. Schnieders Capital Management LLC. now owns 2,115 shares of the Internet television network's stock valued at $2,832,000 after purchasing an additional 228 shares during the last quarter. 80.93% of the stock is owned by hedge funds and other institutional investors.

Key Stories Impacting Netflix

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Netflix is reportedly considering launching always-on, linear-style streaming channels. The move could increase viewing time, improve content monetization and appeal to viewers seeking a traditional television experience. Netflix Killed Cable TV. Now the Streaming Giant Wants to Bring It Back
• Positive Sentiment: An extended Grand Theft Auto VI gameplay trailer is scheduled to debut on Netflix on August 27. The partnership could generate attention and engagement, although it is unlikely to materially change Netflix’s near-term financial outlook. Take-Two Stock Slips Despite News of a GTA VI Trailer Coming to Netflix
• Neutral Sentiment: Director Richard Barton’s sale of 2,160 shares was executed under a pre-arranged Rule 10b5-1 plan, making it a relatively limited signal about management’s current view of NFLX. The director retained 246 shares afterward. Netflix’s Latest Insider Sale Looks Bigger Than It Is
• Neutral Sentiment: Insider David Hyman previously sold shares to cover tax withholding tied to vested equity awards, another transaction with limited fundamental significance. Netflix’s latest quarter showed earnings slightly above expectations and 13.4% year-over-year revenue growth, but sales narrowly missed consensus.
• Negative Sentiment: CEO Gregory Peters sold 27,312 shares worth approximately $2.0 million. Although the filing did not identify a 10b5-1 plan, he continues to own more than 120,000 shares; nevertheless, the sale adds to investor concern after multiple insider transactions. Netflix Insider Plans Stock Sale as NFLX Shares Slip
• Negative Sentiment: Netflix has reportedly underperformed the S&P 500 by a wide margin over the past year. Concerns about weaker engagement, reduced viewing-data disclosure and intensifying streaming competition are weighing on sentiment and valuation. Netflix and MercadoLibre Are Underperforming the S&P 500

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.

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