Netflix (NASDAQ:NFLX) Stock Price Down 1.7% After Analyst Downgrade

Key Points

• Netflix shares fell 1.7% after Erste Group Bank downgraded the stock from a buy to a hold rating, marking a significant shift in analysts' sentiment.
• The company recently reported earnings of $5.87 per share, which fell short of analysts' expectations by $1.01, along with a quarterly revenue of $11.51 billion.
• Insider selling has also been notable, with CEO Theodore A. Sarandos reducing his ownership by 11.78%, indicating potential concerns about the company's future performance.

Netflix, Inc. (NASDAQ:NFLX - Get Free Report) shares traded down 1.7% during mid-day trading on Monday after Erste Group Bank downgraded the stock from a buy rating to a hold rating. The stock traded as low as $1,075.15 and last traded at $1,100.09. 5,730,606 shares were traded during mid-day trading, an increase of 43% from the average session volume of 4,014,548 shares. The stock had previously closed at $1,118.86.

A number of other research analysts have also recently weighed in on NFLX. Sanford C. Bernstein reaffirmed a "buy" rating on shares of Netflix in a research report on Friday, October 17th. Piper Sandler reaffirmed an "overweight" rating and set a $1,400.00 price objective (down from $1,500.00) on shares of Netflix in a research report on Wednesday, October 22nd. Robert W. Baird lifted their price objective on Netflix from $1,300.00 to $1,500.00 and gave the company an "outperform" rating in a research report on Monday, July 21st. Wall Street Zen cut Netflix from a "buy" rating to a "hold" rating in a research report on Saturday, October 4th. Finally, BMO Capital Markets reaffirmed an "outperform" rating and set a $1,425.00 price objective (up from $1,200.00) on shares of Netflix in a research report on Tuesday, July 15th. Two analysts have rated the stock with a Strong Buy rating, twenty-eight have given a Buy rating, eleven have given a Hold rating and two have assigned a Sell rating to the company's stock. Based on data from MarketBeat, the stock has an average rating of "Moderate Buy" and an average price target of $1,341.37.

Insider Buying and Selling at Netflix

In other news, insider David A. Hyman sold 424 shares of the company's stock in a transaction that occurred on Tuesday, August 5th. The stock was sold at an average price of $1,158.67, for a total transaction of $491,276.08. Following the sale, the insider directly owned 31,610 shares of the company's stock, valued at $36,625,558.70. This represents a 1.32% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO Theodore A. Sarandos sold 2,026 shares of the company's stock in a transaction that occurred on Tuesday, August 5th. The stock was sold at an average price of $1,160.62, for a total value of $2,351,416.12. Following the sale, the chief executive officer directly owned 15,168 shares in the company, valued at $17,604,284.16. This trade represents a 11.78% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last ninety days, insiders sold 78,734 shares of company stock worth $93,224,176. Company insiders own 1.37% of the company's stock.

Institutional Trading of Netflix

Hedge funds have recently modified their holdings of the company. Vanguard Group Inc. increased its position in shares of Netflix by 1.0% during the 2nd quarter. Vanguard Group Inc. now owns 38,379,084 shares of the Internet television network's stock valued at $51,394,583,000 after purchasing an additional 381,824 shares during the last quarter. State Street Corp increased its position in shares of Netflix by 2.1% during the 2nd quarter. State Street Corp now owns 17,444,013 shares of the Internet television network's stock valued at $23,359,801,000 after purchasing an additional 360,604 shares during the last quarter. Price T Rowe Associates Inc. MD increased its position in shares of Netflix by 2.7% during the 1st quarter. Price T Rowe Associates Inc. MD now owns 11,732,066 shares of the Internet television network's stock valued at $10,940,505,000 after purchasing an additional 304,399 shares during the last quarter. Geode Capital Management LLC increased its position in shares of Netflix by 2.4% during the 2nd quarter. Geode Capital Management LLC now owns 9,926,733 shares of the Internet television network's stock valued at $13,234,278,000 after purchasing an additional 229,182 shares during the last quarter. Finally, Norges Bank bought a new position in shares of Netflix during the 2nd quarter valued at approximately $7,929,645,000. 80.93% of the stock is owned by hedge funds and other institutional investors.

Netflix Trading Down 1.7%

The stock has a market cap of $466.14 billion, a P/E ratio of 45.95, a P/E/G ratio of 1.91 and a beta of 1.59. The company has a current ratio of 1.33, a quick ratio of 1.33 and a debt-to-equity ratio of 0.56. The company has a 50-day moving average price of $1,195.64 and a two-hundred day moving average price of $1,196.49.

Shares of Netflix are set to split before the market opens on Monday, November 17th. The 10-1 split was announced on Thursday, October 30th. The newly created shares will be payable to shareholders after the market closes on Friday, November 14th.

Netflix (NASDAQ:NFLX - Get Free Report) last released its earnings results on Tuesday, October 21st. The Internet television network reported $5.87 earnings per share for the quarter, missing the consensus estimate of $6.88 by ($1.01). The company had revenue of $11.51 billion for the quarter, compared to the consensus estimate of $11.52 billion. Netflix had a net margin of 24.05% and a return on equity of 41.86%. The business's revenue for the quarter was up 17.2% compared to the same quarter last year. During the same period in the prior year, the firm posted $5.40 EPS. Netflix has set its FY 2025 guidance at EPS. Q4 2025 guidance at 5.450-5.450 EPS. On average, research analysts expect that Netflix, Inc. will post 24.58 EPS for the current fiscal year.

About Netflix

Netflix, Inc provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. The company also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices.

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