Netflix (NASDAQ:NFLX) Shares Up 3.1% - Here's What Happened

Key Points

• Netflix shares rose 3.1% to $67.05, with trading volume 37% above the average, following stronger-than-expected quarterly earnings.
• Third-quarter EPS came in at $0.87 versus $0.82 expected, while revenue increased 11.9% year over year to $12.87 billion and operating income rose 34.6%.
• Analysts remain broadly positive, with Netflix carrying a “Moderate Buy” consensus rating and an average price target of $89.59; ongoing share repurchases may also support per-share earnings and investor sentiment.

Netflix, Inc. (NASDAQ:NFLX - Get Free Report)'s stock price was up 3.1% on Thursday. The company traded as high as $67.49 and last traded at $67.05. Approximately 58,347,220 shares traded hands during trading, an increase of 37% from the average daily volume of 42,721,422 shares. The stock had previously closed at $65.04.

Netflix News Summary

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Netflix’s third-quarter earnings exceeded expectations, with EPS of $0.87 versus an estimated $0.82. Revenue rose 11.9% year over year to approximately $12.87 billion, while operating income increased 34.6%, supporting the view that profits are still expanding despite slower sales growth. The Truth About Netflix's Massive Stock Buybacks
• Positive Sentiment: Netflix continues to repurchase shares at a significant pace. Commentary suggests the buybacks are part of a systematic capital-allocation plan rather than an opportunistic response to the sell-off, but they may still support per-share earnings and investor sentiment. The Truth About Netflix's Massive Stock Buybacks
• Positive Sentiment: Several analysts view the lower valuation as attractive. BMO sees substantial upside, while UBS, JPMorgan, Bank of America and TD Cowen retained positive ratings despite reducing price targets. Cathie Wood’s Ark Invest also bought shares after the earnings-driven decline. Buy the Post-Earnings Selloff in Netflix Stock, Says BMO

Analyst Upgrades and Downgrades

Several equities research analysts recently weighed in on NFLX shares. The Goldman Sachs Group set a $84.00 price objective on shares of Netflix in a research report on Wednesday. Phillip Securities raised shares of Netflix from a "moderate buy" rating to a "strong-buy" rating and set a $110.00 target price on the stock in a report on Sunday, July 19th. Citizens Jmp restated a "market perform" rating on shares of Netflix in a research report on Wednesday. Yorkville Ives assumed coverage on shares of Netflix in a report on Monday, October 5th. They set an "in-line" rating and a $75.00 price target for the company. Finally, Jefferies Financial Group set a $85.00 price target on shares of Netflix and gave the stock a "buy" rating in a research report on Thursday, October 15th. Three equities research analysts have rated the stock with a Strong Buy rating, thirty-four have given a Buy rating, seventeen have assigned a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average price target of $89.59.

Netflix Stock Up 3.1%

The company has a market capitalization of $279.19 billion, a P/E ratio of 19.38, a P/E/G ratio of 0.97 and a beta of 1.62. The company has a debt-to-equity ratio of 0.39, a current ratio of 1.14 and a quick ratio of 1.14. The stock has a 50-day moving average price of $74.52 and a 200-day moving average price of $79.74.

Netflix (NASDAQ:NFLX - Get Free Report) last posted its quarterly earnings data on Tuesday, October 20th. The Internet television network reported $0.87 EPS for the quarter, beating analysts' consensus estimates of $0.82 by $0.05. The company had revenue of $12.87 billion for the quarter, compared to analyst estimates of $12.87 billion. Netflix had a net margin of 29.69% and a return on equity of 42.69%. The company's quarterly revenue was up 11.9% on a year-over-year basis. During the same period in the prior year, the firm posted $0.59 EPS. On average, research analysts predict that Netflix, Inc. will post 3.59 EPS for the current fiscal year.

Insider Activity

In other news, Director Richard Barton sold 2,160 shares of the firm's stock in a transaction that occurred on Wednesday, August 5th. The shares were sold at an average price of $75.10, for a total transaction of $162,216.00. Following the completion of the sale, the director owned 246 shares of the company's stock, valued at $18,474.60. This trade represents a 89.78% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Theodore Sarandos sold 105,850 shares of the firm's stock in a transaction on Monday, August 3rd. The stock was sold at an average price of $73.03, for a total transaction of $7,730,225.50. Following the completion of the sale, the chief executive officer owned 206,266 shares of the company's stock, valued at $15,063,605.98. The trade was a 33.91% decrease in their ownership of the stock. 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. In the last three months, insiders sold 179,045 shares of company stock worth $13,132,194. Company insiders own 1.24% of the company's stock.

Institutional Investors Weigh In On Netflix

Institutional investors and hedge funds have recently made changes to their positions in the business. Merkkuri Wealth Advisors LLC purchased a new stake in shares of Netflix in the first quarter worth approximately $31,000. Bayban raised its stake in shares of Netflix by 400.0% during the 1st quarter. Bayban now owns 350 shares of the Internet television network's stock worth $34,000 after purchasing an additional 280 shares during the period. Clal Insurance Enterprises Holdings Ltd purchased a new position in Netflix in the second quarter valued at about $26,000. Sawyer & Company Inc purchased a new position in Netflix in the third quarter valued at approximately $27,000. Finally, Compound Global Advisors LLC purchased a new position in shares of Netflix during the 2nd quarter valued at $29,000. Institutional investors and hedge funds own 80.93% of the company's stock.

Netflix Company Profile

Netflix, Inc NASDAQ: NFLX is a global entertainment company that provides subscription-based streaming services. Its platform offers a broad selection of television series, films, documentaries, stand-up specials and other programming, including content produced by Netflix and licensed from third-party studios and creators.

The company also develops and distributes original productions under the Netflix brand and has expanded into additional entertainment offerings, including mobile and cloud-based games in select markets and live programming.

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