Netflix (NASDAQ:NFLX) Stock Price Down 2.9% on Analyst Downgrade

Netflix, Inc. (NASDAQ:NFLX) shares were down 2.9% on Friday after Wedbush lowered their price target on the stock from $105.00 to $90.00. Wedbush currently has an outperform rating on the stock. Netflix traded as low as $69.76 and last traded at $70.53. 40,500,050 shares changed hands during mid-day trading, a decline of 4% from the average session volume of 42,250,168 shares. The stock had previously closed at $72.61.

A number of other research firms also recently issued reports on NFLX. Robert W. Baird set a $90.00 price target on Netflix and gave the stock an “outperform” rating in a research report on Wednesday, July 22nd. President Capital cut their price target on Netflix from $134.00 to $83.00 and set a “buy” rating on the stock in a research note on Monday, July 20th. KGI Securities downgraded Netflix from an “outperform” rating to a “neutral” rating and set a $75.00 price objective for the company. in a report on Friday, July 17th. Wolfe Research reaffirmed an “outperform” rating and issued a $95.00 price objective (up from $84.00) on shares of Netflix in a research note on Tuesday, August 25th. Finally, UBS Group lowered their price objective on shares of Netflix from $130.00 to $115.00 and set a “buy” rating for the company in a research note on Friday, July 17th. Four investment analysts have rated the stock with a Strong Buy rating, thirty-four have issued a Buy rating, fifteen have given a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and a consensus target price of $93.82.

Insider Buying and Selling at Netflix

In other news, CEO Gregory K. Peters sold 27,312 shares of the stock in a transaction on Thursday, August 6th. The stock was sold at an average price of $73.54, for a total transaction of $2,008,524.48. Following the completion of the sale, the chief executive officer owned 120,931 shares in the company, valued at approximately $8,893,265.74. This represents a 18.42% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, CFO Spencer Neumann sold 9,248 shares of the firm’s stock in a transaction on Monday, August 10th. The stock was sold at an average price of $75.79, for a total value of $700,905.92. Following the completion of the sale, the chief financial officer directly owned 73,787 shares of the company’s stock, valued at $5,592,316.73. The trade was a 11.14% decrease in their position. The SEC filing for this sale provides additional information. In the last three months, insiders have sold 179,045 shares of company stock worth $13,132,194. 1.24% of the stock is currently owned by company insiders.

Key Headlines Impacting Netflix

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Former Disney and Fox executive Peter Rice will become Netflix’s chief content officer on October 26, replacing Bela Bajaria. Rice’s experience across scripted and unscripted programming, live sports, prestige television and theatrical distribution could help Netflix develop stronger content and improve engagement over time. Here’s who Netflix just brought in to run content
• Positive Sentiment: Analyst support provides a counterweight to the selling. Jefferies upgraded Netflix to “strong buy” and has cited pricing power and advertising growth as potential revenue drivers, while Wedbush maintained an “outperform” rating with a $90 price target. Options activity is also described as bullish ahead of earnings. Netflix stock gets bullish analyst call
• Neutral Sentiment: Netflix reports third-quarter results after the market closes on October 20. Investors will watch revenue growth, advertising commitments, margins, subscriber trends and management’s outlook; options traders expect a potentially large post-earnings move. Netflix earnings options outlook
• Negative Sentiment: The leadership change is being interpreted as evidence that Netflix’s content strategy needs a reset. Bajaria’s departure comes after nearly a decade with the company and immediately follows Netflix’s announcement that it will eliminate about 1,000 jobs, or 6% of its workforce. The timing, just before earnings, is increasing investor uncertainty. Netflix shares under pressure as chief content officer departs
• Negative Sentiment: Investors remain concerned about slowing viewer engagement, rising churn and intensifying streaming competition. Analysts note that pricing and advertising may support revenue, but slower viewership growth and Netflix’s premium valuation leave little room for disappointing guidance. Netflix prepares for third-quarter earnings

Institutional Investors Weigh In On Netflix

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Nykredit A S purchased a new stake in shares of Netflix during the 2nd quarter worth about $105,697,000. Rockland Trust Co. grew its position in shares of Netflix by 27.5% during the 3rd quarter. Rockland Trust Co. now owns 219,221 shares of the Internet television network’s stock valued at $15,253,000 after acquiring an additional 47,339 shares during the period. Ritholtz Wealth Management grew its position in shares of Netflix by 25.0% during the 1st quarter. Ritholtz Wealth Management now owns 106,451 shares of the Internet television network’s stock valued at $10,235,000 after acquiring an additional 21,260 shares during the period. Welch & Forbes LLC increased its stake 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 valued at $11,389,000 after purchasing an additional 115,125 shares in the last quarter. Finally, USS Investment Management Ltd increased its stake 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 valued at $85,244,000 after purchasing an additional 213,972 shares in the last quarter. 80.93% of the stock is currently owned by hedge funds and other institutional investors.

Netflix Trading Down 2.9%

The stock has a market cap of $293.68 billion, a PE ratio of 22.20, a price-to-earnings-growth ratio of 1.00 and a beta of 1.62. 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 company has a 50 day moving average of $75.25 and a two-hundred day moving average of $80.73.

Netflix (NASDAQ:NFLX) last released its quarterly earnings results on Thursday, July 16th. The Internet television network reported $0.80 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.79 by $0.01. The firm had revenue of $12.56 billion for the quarter, compared to analysts’ expectations of $12.58 billion. Netflix had a net margin of 28.22% and a return on equity of 40.02%. The firm’s revenue for the quarter was up 13.4% compared to the same quarter last year. During the same quarter last year, the company earned $0.72 EPS. Sell-side analysts anticipate that Netflix, Inc. will post 3.59 earnings per share for the current fiscal year.

About Netflix

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.