Netflix (NASDAQ:NFLX) Shares Climb 2.9% - Still a Buy?

Key Points

• Netflix shares rose 2.9% to $72.61, while analysts maintained an overall “Moderate Buy” consensus and an average price target of $94.41.
• Positive catalysts include Jefferies’ new Buy rating with an $85 target and Netflix’s acquisition of select 2030 FIFA World Cup broadcast rights in Spain and Andorra.
• Investors face growth concerns ahead of the October 20 earnings report, including plans to cut about 1,000 jobs and data showing a 16.6% increase in U.S. app churn and weaker engagement.

Shares of Netflix, Inc. (NASDAQ:NFLX - Get Free Report) traded up 2.9% during trading on Thursday. The company traded as high as $73.07 and last traded at $72.61. 40,035,997 shares were traded during trading, a decline of 5% from the average session volume of 42,258,301 shares. The stock had previously closed at $70.57.

Key Netflix News

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Jefferies initiated coverage with a Buy rating and an $85 price target, suggesting the recent selloff has created upside potential if Netflix can stabilize growth and engagement. Netflix stock gets bullish analyst call ahead of next week's earnings
• Positive Sentiment: Netflix secured rights to broadcast select 2030 FIFA World Cup matches in Spain and Andorra, potentially strengthening its content offering and helping attract or retain viewers. Netflix lands 2030 World Cup rights
• Neutral Sentiment: Investors are positioning for Netflix’s October 20 earnings report. Wall Street estimates for revenue, earnings and engagement metrics may determine whether management can support its full-year outlook and address slowing growth. Netflix Q3 earnings estimates
• Negative Sentiment: Netflix plans to eliminate roughly 1,000 jobs, or 6% of its workforce, its largest reduction since 2022. Management described the move as resource discipline and preparation for future investment, but the timing signals pressure from slower growth and intensifying competition. Netflix is laying off roughly 6% of its workforce
• Negative Sentiment: Third-party data indicate U.S. app churn increased 16.6% while viewing engagement weakened. Analysts and investors fear subscribers are canceling more frequently as competition for attention increases, creating a key risk to Netflix’s growth and upcoming results. Netflix U.S. app churn warning

Analyst Ratings Changes

Several research analysts have weighed in on the stock. Guggenheim restated a "buy" rating and set a $80.00 price objective (up from $75.00) on shares of Netflix in a report on Thursday, October 1st. Loop Capital reduced their price objective on shares of Netflix from $115.00 to $95.00 and set a "buy" rating for the company in a report on Friday, July 24th. UBS Group reduced their price objective on shares of Netflix from $130.00 to $115.00 and set a "buy" rating for the company in a report on Friday, July 17th. KGI Securities downgraded shares of Netflix from an "outperform" rating to a "neutral" rating and set a $75.00 target price for the company. in a research report on Friday, July 17th. Finally, CLSA initiated coverage on shares of Netflix in a report on Monday, July 20th. They issued an "outperform" rating on the stock. Three equities research analysts have rated the stock with a Strong Buy rating, thirty-five have assigned a Buy rating, fifteen have given a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $94.41.

Netflix Trading Up 2.9%

The company has a debt-to-equity ratio of 0.39, a quick ratio of 1.14 and a current ratio of 1.14. The firm has a market capitalization of $302.34 billion, a P/E ratio of 22.85, a PEG ratio of 0.99 and a beta of 1.62. The firm has a 50 day simple moving average of $75.27 and a two-hundred day simple moving average of $80.87.

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 (EPS) for the quarter, topping the consensus estimate of $0.79 by $0.01. Netflix had a net margin of 28.22% and a return on equity of 40.02%. The firm had revenue of $12.56 billion during the quarter, compared to analyst estimates of $12.58 billion. During the same quarter in the prior year, the business posted $0.72 EPS. The business's revenue was up 13.4% compared to the same quarter last year. Equities research analysts forecast that Netflix, Inc. will post 3.59 earnings per share for the current year.

Insiders Place Their Bets

In other Netflix news, insider David Hyman sold 5,723 shares of the stock in a transaction dated Tuesday, August 4th. The shares were sold at an average price of $72.85, for a total value of $416,920.55. Following the completion of the sale, the insider owned 316,100 shares in the company, valued at approximately $23,027,885. This trade represents a 1.78% decrease in their position. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Theodore Sarandos sold 27,312 shares of Netflix stock in a transaction that occurred on Tuesday, August 4th. The stock was sold at an average price of $73.35, for a total transaction of $2,003,335.20. Following the transaction, the chief executive officer directly owned 178,954 shares in the company, valued at approximately $13,126,275.90. This represents a 13.24% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 179,045 shares of company stock worth $13,132,194 in the last ninety days. 1.24% of the stock is owned by corporate insiders.

Institutional Trading of Netflix

A number of hedge funds have recently bought and sold shares of NFLX. Nykredit A S bought a new stake in Netflix in the second quarter valued at $105,697,000. Rockland Trust Co. raised its holdings in Netflix by 27.5% in the 3rd quarter. Rockland Trust Co. now owns 219,221 shares of the Internet television network's stock worth $15,253,000 after purchasing an additional 47,339 shares in the last quarter. Ritholtz Wealth Management raised its holdings in Netflix by 25.0% in the 1st quarter. Ritholtz Wealth Management now owns 106,451 shares of the Internet television network's stock worth $10,235,000 after purchasing an additional 21,260 shares in the last quarter. Welch & Forbes LLC lifted its position in shares of Netflix by 3,464.5% in the 1st quarter. Welch & Forbes LLC now owns 118,448 shares of the Internet television network's stock worth $11,389,000 after purchasing an additional 115,125 shares during the period. Finally, USS Investment Management Ltd lifted its position in shares of Netflix by 31.8% in the 1st quarter. USS Investment Management Ltd now owns 886,527 shares of the Internet television network's stock worth $85,244,000 after purchasing an additional 213,972 shares during the period. 80.93% of the stock is currently owned by institutional investors.

Netflix Company Profile

Netflix, Inc NASDAQ: NFLX is a global entertainment company that operates a subscription-based streaming service. It offers a broad range of television series, films, documentaries, and other programming, including original productions developed under the Netflix brand and licensed content from third-party studios.

The company also provides advertising-supported viewing options in some markets and has expanded into related entertainment categories, including mobile and cloud-based games, live programming, and consumer products associated with selected titles.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.