Netflix (NASDAQ:NFLX) Hits New 12-Month Low Following Analyst Downgrade

Key Points

• Netflix shares hit a new 52-week low after KGI Securities downgraded the stock from outperform to neutral, with the price falling to as low as $65.65 during Friday trading.
• Despite the drop, most analysts still remain constructive on Netflix overall: the stock carries a consensus rating of “Moderate Buy” and an average price target of $108.56, though several firms recently trimmed their targets.
• Netflix’s latest earnings were mixed: EPS of $0.80 slightly beat estimates, but revenue of $12.56 billion came in just below expectations, reinforcing investor concerns about slower growth.

Netflix, Inc. (NASDAQ:NFLX - Get Free Report)'s share price reached a new 52-week low during mid-day trading on Friday after KGI Securities downgraded the stock from an outperform rating to a neutral rating. The stock traded as low as $65.65 and last traded at $65.89, with a volume of 5877751 shares. The stock had previously closed at $74.35.

Several other research analysts also recently commented on the company. Morgan Stanley reiterated an "overweight" rating and set a $90.00 target price (down from $115.00) on shares of Netflix in a research note on Tuesday. President Capital lifted their target price on Netflix from $133.00 to $134.00 and gave the stock a "buy" rating in a report on Tuesday, March 31st. UBS Group dropped their price objective on shares of Netflix from $130.00 to $115.00 and set a "buy" rating for the company in a research note on Friday. Phillip Securities boosted their price objective on shares of Netflix from $100.00 to $110.00 in a report on Monday, April 20th. Finally, Citigroup restated a "buy" rating and set a $100.00 target price (down from $115.00) on shares of Netflix in a research report on Thursday, July 9th. Two research analysts have rated the stock with a Strong Buy rating, thirty-three have given a Buy rating, sixteen have issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, Netflix presently has an average rating of "Moderate Buy" and a consensus price target of $108.56.

Insider Buying and Selling at Netflix

In other news, CEO Gregory K. Peters sold 27,312 shares of the firm's stock in a transaction dated 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 completion of the transaction, the chief executive officer directly owned 120,931 shares in the company, valued at $10,725,370.39. This trade represents a 18.42% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, insider David A. Hyman sold 5,722 shares of the business's stock in a transaction that occurred on Tuesday, May 5th. The stock was sold at an average price of $88.08, for a total transaction of $503,993.76. Following the completion of the transaction, the insider owned 316,100 shares in the company, valued at $27,842,088. This trade represents a 1.78% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 899,839 shares of company stock worth $80,141,661 over the last three months. 1.24% of the stock is owned by corporate insiders.

More Netflix News

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: UBS Group kept a Buy rating on Netflix despite cutting its price target to $115 from $130, implying meaningful upside from current levels.
• Positive Sentiment: Wedbush maintained an Outperform rating, though it lowered its target to $105 from $118, signaling continued confidence in Netflix’s long-term earnings power.
• Positive Sentiment: TD Cowen, Needham, Citi, and Canaccord all reiterated bullish ratings, citing margin expansion, ad growth, AI-driven efficiency, and Netflix’s structural growth story.
• Neutral Sentiment: Netflix posted EPS of $0.80, slightly ahead of estimates, but revenue of $12.56 billion came in just below expectations, making the quarter mixed rather than outright weak.
• Neutral Sentiment: Management highlighted future growth areas such as advertising, live events, creator content, podcasts, and vertical video, which could help offset slowing viewing growth over time.
• Negative Sentiment: Multiple reports say investors are worried Netflix may be entering a period of slower growth, with second-quarter results and guidance failing to restore confidence in the stock’s premium valuation. Reuters article
• Negative Sentiment: Barclays, Pivotal Research, and Erste Group all cut expectations or estimates, reflecting a more cautious stance after the earnings report and adding to near-term pressure on NFLX. Benzinga article

Institutional Inflows and Outflows

A number of institutional investors have recently modified their holdings of NFLX. First Financial Corp IN increased its holdings in shares of Netflix by 900.0% during the fourth quarter. First Financial Corp IN now owns 270 shares of the Internet television network's stock valued at $25,000 after acquiring an additional 243 shares in the last quarter. DiNuzzo Private Wealth Inc. increased its stake in Netflix by 885.2% during the 4th quarter. DiNuzzo Private Wealth Inc. now owns 266 shares of the Internet television network's stock valued at $25,000 after purchasing an additional 239 shares in the last quarter. Turning Point Benefit Group Inc. raised its holdings in Netflix by 13,400.0% during the fourth quarter. Turning Point Benefit Group Inc. now owns 270 shares of the Internet television network's stock worth $25,000 after buying an additional 268 shares during the last quarter. Imprint Wealth LLC acquired a new position in Netflix during the third quarter worth $25,000. Finally, Cornerstone Financial Management LLC bought a new position in shares of Netflix in the fourth quarter valued at $26,000. Institutional investors and hedge funds own 80.93% of the company's stock.

Netflix Price Performance

The stock has a market capitalization of $279.73 billion, a P/E ratio of 21.36, a price-to-earnings-growth ratio of 0.94 and a beta of 1.52. The business's 50 day simple moving average is $80.52 and its two-hundred day simple moving average is $87.03. The company has a quick ratio of 1.41, a current ratio of 1.41 and a debt-to-equity ratio of 0.43.

Netflix (NASDAQ:NFLX - Get Free Report) last posted its earnings results on Thursday, July 16th. The Internet television network reported $0.80 earnings per share for the quarter, beating analysts' consensus estimates of $0.79 by $0.01. Netflix had a return on equity of 40.92% and a net margin of 28.52%.The company had revenue of $12.56 billion for the quarter, compared to analyst estimates of $12.58 billion. During the same quarter last year, the company earned $0.72 earnings per share. The company's revenue for the quarter was up 13.4% on a year-over-year basis. As a group, sell-side analysts forecast that Netflix, Inc. will post 3.6 earnings per share 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.

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