Netflix (NASDAQ:NFLX) Stock Price Down 2.3% - Here's Why

Key Points

• Netflix shares fell 2.3% in Monday trading, dipping to an intraday low of $85.10 as volume came in below average.
• Texas Attorney General Ken Paxton sued Netflix, alleging the company collected user and children’s data without proper consent and profited from sensitive behavioral information, adding legal and regulatory risk.
• Despite the stock move, Netflix’s latest earnings beat estimates with $1.23 EPS on $12.25 billion in revenue, while analysts still rate the stock a “Moderate Buy” with an average price target of $114.82.

Netflix, Inc. (NASDAQ:NFLX - Get Free Report) dropped 2.3% during trading on Monday . The company traded as low as $85.10 and last traded at $85.45. Approximately 39,870,797 shares changed hands during mid-day trading, a decline of 15% from the average daily volume of 46,827,230 shares. The stock had previously closed at $87.49.

Netflix News Roundup

Here are the key news stories impacting Netflix this week:

• Negative Sentiment: Texas Attorney General Ken Paxton has sued Netflix over allegations that it collected users’ data without proper consent and profited from sensitive behavioral information, creating legal and compliance risk for the company. Reuters article
• Negative Sentiment: Additional reports say the lawsuit also accuses Netflix of collecting children’s data and running an “addictive” platform, which could increase scrutiny from regulators and lawmakers. CNET article
• Neutral Sentiment: Netflix remains a major topic in media and advertising coverage, including this week’s TV upfronts, where its ad-supported strategy and pricing power continue to be discussed by advertisers and industry peers. CNBC article
• Neutral Sentiment: Separate commentary on Netflix’s recent price increase to $19.99 for its standard ad-free plan highlights ongoing monetization strength, but it does not directly offset the legal overhang today. CNBC article
• Neutral Sentiment: A reported increase in short interest appears unreliable because the filing shows zero shares and a zero-day short-interest ratio, so it is unlikely to be a meaningful trading signal.

Analyst Upgrades and Downgrades

NFLX has been the topic of a number of research analyst reports. Rosenblatt Securities lowered their price target on Netflix from $96.00 to $95.00 and set a "neutral" rating on the stock in a report on Friday, April 17th. TD Cowen decreased their price objective on Netflix from $115.00 to $112.00 and set a "buy" rating on the stock in a report on Wednesday, January 21st. Phillip Securities upped their price objective on Netflix from $100.00 to $110.00 in a report on Monday, April 20th. Weiss Ratings raised Netflix from a "hold (c)" rating to a "hold (c+)" rating in a report on Monday, May 4th. Finally, Daiwa Securities Group upped their price objective on Netflix from $97.00 to $102.00 and gave the stock an "outperform" rating in a report on Thursday, April 23rd. Two research analysts have rated the stock with a Strong Buy rating, thirty-four have given a Buy rating and fifteen have issued a Hold rating to the company's stock. According to MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average price target of $114.82.

Netflix Trading Down 2.3%

The stock has a market cap of $359.81 billion, a P/E ratio of 27.60, a P/E/G ratio of 1.11 and a beta of 1.55. The company has a current ratio of 1.41, a quick ratio of 1.41 and a debt-to-equity ratio of 0.43. The company has a 50-day moving average price of $95.44 and a two-hundred day moving average price of $95.75.

Netflix (NASDAQ:NFLX - Get Free Report) last released its earnings results on Thursday, April 16th. The Internet television network reported $1.23 earnings per share for the quarter, beating the consensus estimate of $0.76 by $0.47. The firm had revenue of $12.25 billion for the quarter, compared to the consensus estimate of $12.17 billion. Netflix had a return on equity of 40.92% and a net margin of 28.52%.The company's revenue for the quarter was up 16.2% compared to the same quarter last year. During the same quarter in the previous year, the company posted $6.61 EPS. Netflix has set its Q2 2026 guidance at 0.780-0.780 EPS. On average, research analysts expect that Netflix, Inc. will post 3.6 EPS for the current fiscal year.

Insider Buying and Selling

In other news, CFO Spencer Adam Neumann sold 57,260 shares of the business's stock in a transaction that occurred on Friday, February 27th. The stock was sold at an average price of $95.50, for a total transaction of $5,468,330.00. Following the transaction, the chief financial officer owned 73,787 shares of the company's stock, valued at approximately $7,046,658.50. The trade was a 43.69% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, CEO Theodore A. Sarandos sold 27,312 shares of the business's stock in a transaction that occurred on Tuesday, May 5th. The shares were sold at an average price of $87.97, for a total value of $2,402,636.64. Following the transaction, the chief executive officer directly owned 284,804 shares in the company, valued at approximately $25,054,207.88. This represents a 8.75% 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. In the last quarter, insiders sold 1,453,217 shares of company stock worth $137,676,777. 1.37% of the stock is owned by company insiders.

Hedge Funds Weigh In On Netflix

Several hedge funds have recently bought and sold shares of the business. Pacific Sun Financial Corp grew its position in Netflix by 3.4% in the 1st quarter. Pacific Sun Financial Corp now owns 6,281 shares of the Internet television network's stock valued at $604,000 after acquiring an additional 208 shares during the last quarter. PNC Financial Services Group Inc. grew its position in Netflix by 9.1% in the 1st quarter. PNC Financial Services Group Inc. now owns 1,689,036 shares of the Internet television network's stock valued at $162,401,000 after acquiring an additional 140,389 shares during the last quarter. Oslo Pensjonsforsikring AS bought a new position in Netflix in the 1st quarter valued at $1,370,000. Mathes Company Inc. grew its position in Netflix by 38.6% in the 1st quarter. Mathes Company Inc. now owns 15,910 shares of the Internet television network's stock valued at $1,530,000 after acquiring an additional 4,430 shares during the last quarter. Finally, Wilkerson Advisory Group LLC grew its position in Netflix by 174.2% in the 1st quarter. Wilkerson Advisory Group LLC now owns 998 shares of the Internet television network's stock valued at $96,000 after acquiring an additional 634 shares during the last quarter. Institutional investors own 80.93% of the company's stock.

About Netflix

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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