Netflix (NASDAQ:NFLX) Stock Price Up 1.8% - Should You Buy?

Key Points

• Netflix shares rose 1.8% to $77.40, though trading volume was about 49% below the average session volume.
• The latest quarter showed 13.4% year-over-year revenue growth and slightly better-than-expected EPS, but revenue narrowly missed estimates. Analysts maintain a “Moderate Buy” consensus with an average price target of $96.65, despite several recent target-price cuts and one downgrade to “Sell.”
• Potential growth drivers include resilient streaming demand, advertising expansion and longer theatrical runs, while risks include a Florida lawsuit over alleged child-data tracking, weaker near-term outlook concerns and possible new local-content regulations.

Netflix, Inc. (NASDAQ:NFLX - Get Free Report)'s share price rose 1.8% on Friday . The company traded as high as $77.57 and last traded at $77.40. 22,097,160 shares traded hands during mid-day trading, a decline of 49% from the average session volume of 42,956,473 shares. The stock had previously closed at $76.01.

Trending Headlines about Netflix

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Netflix is included among broadcast and television stocks benefiting from strong content consumption and resilient digital viewing, supporting the company’s long-term engagement and advertising opportunity. Broadcast and television industry outlook
• Positive Sentiment: Netflix plans longer theatrical runs and will report box-office revenue for six upcoming films, potentially creating an additional monetization channel and improving the economics of its movie slate. Netflix theatrical strategy
• Positive Sentiment: Options-market activity is drawing attention from investors, although the available report does not identify a specific directional trade or catalyst. Netflix options activity
• Neutral Sentiment: Netflix’s latest reported quarter showed revenue growth of 13.4% year over year and earnings slightly above consensus, but revenue narrowly missed estimates, leaving investors focused on forward guidance.
• Neutral Sentiment: Director Richard Barton sold 720 shares for approximately $54,194 under a pre-arranged Rule 10b5-1 plan. The relatively small, scheduled transaction offers limited insight into management’s current outlook. Netflix director stock sale
• Negative Sentiment: Florida sued Netflix for billions, alleging that the company misled families and improperly tracked children’s data for advertising. The case creates potential legal costs, reputational damage and restrictions on the advertising business. Florida lawsuit against Netflix
• Negative Sentiment: Commentary citing a weak second-quarter outlook is adding pressure to expectations for near-term subscriber, viewing or revenue growth. Netflix outlook concerns
• Negative Sentiment: A poll showing broad Canadian support for requiring streamers to fund local content signals possible additional compliance obligations and production costs for Netflix. Canadian streaming regulation

Wall Street Analyst Weigh In

Several research analysts recently issued reports on the company. Loop Capital reduced their target price on Netflix from $115.00 to $95.00 and set a "buy" rating on the stock in a research report on Friday, July 24th. The Goldman Sachs Group lowered Netflix from an "underweight" rating to a "sell" rating in a research note on Monday, July 20th. Sanford C. Bernstein set a $95.00 price objective on shares of Netflix and gave the company an "outperform" rating in a report on Friday, July 17th. Moffett Nathanson decreased their price objective on shares of Netflix from $115.00 to $100.00 and set a "buy" rating for the company in a research report on Friday, July 17th. Finally, 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 research report on Sunday, July 19th. Four research analysts have rated the stock with a Strong Buy rating, thirty-four have assigned a Buy rating, sixteen have issued a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, Netflix currently has an average rating of "Moderate Buy" and a consensus price target of $96.65.

Netflix Stock Performance

The company has a current ratio of 1.14, a quick ratio of 1.14 and a debt-to-equity ratio of 0.39. The firm's fifty day moving average is $75.72 and its 200 day moving average is $84.43. The company has a market cap of $322.29 billion, a PE ratio of 24.36, a price-to-earnings-growth ratio of 1.07 and a beta of 1.53.

Netflix (NASDAQ:NFLX - Get Free Report) last announced 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 company had revenue of $12.56 billion for the quarter, compared to analysts' expectations of $12.58 billion. During the same quarter in the previous year, the company posted $0.72 EPS. The firm's quarterly revenue was up 13.4% on a year-over-year basis. As a group, research analysts predict that Netflix, Inc. will post 3.59 EPS for the current fiscal year.

Insider Activity at Netflix

In other Netflix news, insider David Hyman sold 5,723 shares of the company's stock in a transaction dated Tuesday, August 4th. The stock was sold at an average price of $72.85, for a total transaction of $416,920.55. Following the sale, the insider owned 316,100 shares in the company, valued at $23,027,885. This represents a 1.78% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Richard Barton sold 720 shares of the stock in a transaction on Thursday, September 10th. The shares were sold at an average price of $75.27, for a total value of $54,194.40. Following the completion of the transaction, the director directly owned 2,460 shares in the company, valued at $185,164.20. This trade represents a 22.64% 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. Insiders sold 215,035 shares of company stock worth $15,922,139 over the last 90 days. 1.24% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Netflix

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the company. Shepherd Street Advisors LLC purchased a new position in shares of Netflix in the 4th quarter valued at approximately $2,216,000. University of Texas Texas AM Investment Management Co. grew its stake in Netflix by 798.5% in the fourth quarter. University of Texas Texas AM Investment Management Co. now owns 42,542 shares of the Internet television network's stock worth $3,989,000 after purchasing an additional 37,807 shares during the period. New Mexico Educational Retirement Board grew its stake in Netflix by 900.0% in the fourth quarter. New Mexico Educational Retirement Board now owns 192,210 shares of the Internet television network's stock worth $18,022,000 after purchasing an additional 172,989 shares during the period. Ritholtz Wealth Management raised its holdings in Netflix by 25.0% in the first 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. Finally, Natixis Advisors LLC raised its holdings in Netflix by 797.3% in the fourth quarter. Natixis Advisors LLC now owns 4,989,919 shares of the Internet television network's stock worth $467,854,000 after purchasing an additional 4,433,837 shares in the last quarter. Hedge funds and other 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 access to television series, films, documentaries and other video content. Its service includes Netflix-produced and licensed programming, with offerings that may vary by market. The company also provides an advertising-supported plan in selected countries and has expanded into mobile games and other interactive entertainment.

Netflix was founded in 1997 by Reed Hastings and Marc Randolph as a DVD-by-mail rental service in the United States.

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