Netflix (NASDAQ:NFLX) Trading Down 7.3% on Analyst Downgrade

Key Points

• Netflix shares fell 7.3% after JPMorgan Chase cut its price target sharply from $118 to $85, even though it kept an overweight rating. The stock traded as low as $65.08 amid very heavy volume, far above its daily average.
• Analysts remain mixed but still generally constructive: several firms lowered targets after earnings, while the overall consensus rating is still Moderate Buy with a consensus target price of $103.97. The article also notes that some analysts view the pullback as a potential entry point.
• Insider selling has been notable, including recent sales by CFO Spencer Adam Neumann and Director Bradford L. Smith, with insiders selling 899,839 shares worth about $80.1 million over the last 90 days. Netflix also reported Q2 EPS of $0.80, slightly ahead of estimates, on revenue growth of 13.4% year over year.

Netflix, Inc. (NASDAQ:NFLX - Get Free Report) shares traded down 7.3% during mid-day trading on Friday after JPMorgan Chase & Co. lowered their price target on the stock from $118.00 to $85.00. JPMorgan Chase & Co. currently has an overweight rating on the stock. Netflix traded as low as $65.08 and last traded at $68.95. 141,335,396 shares traded hands during mid-day trading, an increase of 208% from the average daily volume of 45,892,918 shares. The stock had previously closed at $74.35.

Several other equities analysts have also weighed in on the stock. China Renaissance boosted their target price on shares of Netflix from $90.00 to $100.00 and gave the company a "hold" rating in a report on Friday, April 17th. KGI Securities lowered shares of Netflix from an "outperform" rating to a "neutral" rating and set a $75.00 price target on the stock. in a research report on Friday. Piper Sandler reiterated an "overweight" rating and issued a $85.00 price objective (down from $115.00) on shares of Netflix in a report on Friday. Guggenheim set a $75.00 price objective on Netflix and gave the company a "buy" rating in a report on Friday. Finally, Erste Group Bank lowered Netflix from a "buy" rating to a "hold" rating in a research report on Monday, April 27th. Two analysts have rated the stock with a Strong Buy rating, thirty-five have assigned a Buy rating and sixteen have issued a Hold rating to the company's stock. Based on data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and a consensus target price of $103.97.

Insiders Place Their Bets

In other news, CFO Spencer Adam Neumann sold 9,253 shares of the company's stock in a transaction that occurred on Thursday, May 7th. The shares were sold at an average price of $88.95, for a total value of $823,054.35. Following the transaction, the chief financial officer directly owned 73,787 shares in the company, valued at approximately $6,563,353.65. This represents a 11.14% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Also, Director Bradford L. Smith sold 35,990 shares of the 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. The trade was a 31.11% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders sold 899,839 shares of company stock worth $80,141,661. Insiders own 1.24% of the company's stock.

More Netflix News

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Netflix continues to expand engagement drivers such as short-form content, video games, podcasts, ads, and live programming, which could create new monetization opportunities. Ad Engagement & Content Opportunities Offer Bullish Edge for NFLX
• Positive Sentiment: Several analysts still see upside and reiterated bullish ratings, arguing Netflix remains a high-quality asset with margin expansion and ad growth potential. Netflix: Solid Q2 Results and Structural Growth Story Support Buy Rating with Unchanged $125 Price Target
• Positive Sentiment: JPMorgan and other firms lowered price targets after earnings, but still maintained positive ratings, suggesting the selloff may have created a lower entry point for long-term investors. Analyst price target changes
• Neutral Sentiment: Netflix’s AI initiatives, including use of generative AI in production workflows, were highlighted as a cost-efficiency story, but they have not been enough to reaccelerate the stock. Why Netflix's AI Push Isn't Reviving the Stock
• Negative Sentiment: Q3 revenue and EPS guidance missed estimates, reinforcing worries that Netflix’s growth is decelerating faster than expected. Netflix third-quarter earnings forecast falls shy of Wall Street expectations
• Negative Sentiment: The company’s plan to provide viewership data only annually starting in 2027 has raised concerns that investors will have less visibility into a key operating metric. Netflix is getting stingier about its viewing data, and Wall Street isn't happy
• Negative Sentiment: Analysts and media reports point to slowing revenue growth, rising competition, and a weaker-than-hoped outlook as the main reasons NFLX is being sold off. Netflix is paying up for costly sports rights. Is the company making the right bets?

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently modified their holdings of NFLX. First Financial Corp IN grew its position in Netflix by 900.0% in the 4th 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. boosted its stake in shares of Netflix by 885.2% in the fourth 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 during the period. Turning Point Benefit Group Inc. boosted its stake in shares of Netflix by 13,400.0% in the fourth quarter. Turning Point Benefit Group Inc. now owns 270 shares of the Internet television network's stock valued at $25,000 after purchasing an additional 268 shares during the period. Imprint Wealth LLC acquired a new position in shares of Netflix in the third quarter valued at approximately $25,000. Finally, Cornerstone Financial Management LLC acquired a new position in shares of Netflix in the fourth quarter valued at approximately $26,000. 80.93% of the stock is currently owned by hedge funds and other institutional investors.

Netflix Stock Performance

The firm's 50 day moving average is $80.52 and its two-hundred day moving average is $87.03. The stock has a market capitalization of $290.33 billion, a PE ratio of 22.27, a P/E/G ratio of 0.94 and a beta of 1.52. The company has a debt-to-equity ratio of 0.43, a quick ratio of 1.41 and a current ratio of 1.41.

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