Netflix (NASDAQ:NFLX) Trading Down 10.1% Following Weak Earnings

Key Points

• Netflix's share price dropped 10.1% to $1,116.37 after a disappointing earnings report, missing earnings per share estimates by $1.01.
• Despite a year-over-year revenue increase of 17.2%, Netflix's revenue for the quarter was only slightly lower than analyst projections, indicating potential growth challenges.
• Analysts' ratings vary, with the average recommendation being a "Moderate Buy", and a consensus target price of $1,341.22, reflecting a mixed outlook on the stock.

Netflix, Inc. (NASDAQ:NFLX - Get Free Report)'s share price was down 10.1% on Wednesday following a dissappointing earnings announcement. The stock traded as low as $1,112.51 and last traded at $1,116.37. Approximately 14,544,607 shares were traded during mid-day trading, an increase of 267% from the average daily volume of 3,965,839 shares. The stock had previously closed at $1,241.35.

The Internet television network reported $5.87 earnings per share for the quarter, missing the consensus estimate of $6.88 by ($1.01). The firm had revenue of $11.51 billion during the quarter, compared to analyst estimates of $11.52 billion. Netflix had a net margin of 24.58% and a return on equity of 42.50%. The company's quarterly revenue was up 17.2% compared to the same quarter last year. During the same quarter last year, the company earned $5.40 EPS. Netflix has set its FY 2025 guidance at EPS. Q4 2025 guidance at 5.450-5.450 EPS.

Analyst Ratings Changes

Several analysts have recently weighed in on NFLX shares. UBS Group set a $1,500.00 price objective on Netflix in a report on Wednesday. Sanford C. Bernstein reaffirmed a "buy" rating on shares of Netflix in a report on Friday, October 17th. Jefferies Financial Group restated a "buy" rating and set a $1,500.00 price objective on shares of Netflix in a report on Wednesday. Wells Fargo & Company cut their price objective on Netflix from $1,560.00 to $1,510.00 and set an "overweight" rating on the stock in a report on Wednesday. Finally, Wall Street Zen downgraded Netflix from a "buy" rating to a "hold" rating in a report on Saturday, October 4th. Two analysts have rated the stock with a Strong Buy rating, twenty-seven have given a Buy rating, eight have assigned a Hold rating and two have issued a Sell rating to the company. According to data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $1,341.22.

Insider Transactions at Netflix

In related news, insider Cletus R. Willems sold 238 shares of the stock in a transaction dated Wednesday, August 6th. The stock was sold at an average price of $1,153.52, for a total value of $274,537.76. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, CEO Gregory K. Peters sold 2,026 shares of the company's stock in a transaction dated Tuesday, August 5th. The stock was sold at an average price of $1,157.44, for a total value of $2,344,973.44. Following the completion of the transaction, the chief executive officer directly owned 12,781 shares in the company, valued at approximately $14,793,240.64. The trade was a 13.68% decrease in their ownership of the stock. The disclosure for this sale can be found here. In the last 90 days, insiders sold 104,100 shares of company stock worth $122,710,980. 1.37% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several hedge funds have recently bought and sold shares of the company. Brighton Jones LLC increased its holdings in shares of Netflix by 5.0% during the 4th quarter. Brighton Jones LLC now owns 5,390 shares of the Internet television network's stock valued at $4,804,000 after acquiring an additional 257 shares during the last quarter. Revolve Wealth Partners LLC increased its holdings in shares of 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 acquiring an additional 144 shares during the last quarter. GAMMA Investing LLC increased its holdings in shares of Netflix by 17.6% during the 1st quarter. GAMMA Investing LLC now owns 9,475 shares of the Internet television network's stock valued at $8,836,000 after acquiring an additional 1,415 shares during the last quarter. JFS Wealth Advisors LLC increased its holdings in shares of Netflix by 6.3% during the 1st quarter. JFS Wealth Advisors LLC now owns 544 shares of the Internet television network's stock valued at $507,000 after acquiring an additional 32 shares during the last quarter. Finally, Continuum Advisory LLC increased its holdings in shares of Netflix by 9.4% during the 1st quarter. Continuum Advisory LLC now owns 862 shares of the Internet television network's stock valued at $804,000 after acquiring an additional 74 shares during the last quarter. 80.93% of the stock is owned by institutional investors and hedge funds.

Netflix Stock Performance

The company has a current ratio of 1.34, a quick ratio of 1.34 and a debt-to-equity ratio of 0.58. The firm has a market cap of $474.38 billion, a price-to-earnings ratio of 47.57, a price-to-earnings-growth ratio of 2.08 and a beta of 1.59. The stock has a fifty day moving average price of $1,214.20 and a 200 day moving average price of $1,182.49.

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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