Netflix (NASDAQ:NFLX) Stock Price Down 2.9% – What’s Next?

Netflix, Inc. (NASDAQ:NFLX) dropped 2.9% on Thursday. The company traded as low as $62.55 and last traded at $62.69. Approximately 31,183,290 shares changed hands during mid-day trading, a decline of 27% from the average session volume of 42,614,832 shares. The stock had previously closed at $64.54.

Key Headlines Impacting Netflix

Investors following NFLX have been watching these headlines:

• Positive Sentiment: Netflix continues to generate substantial cash, and its packed holiday release schedule could help support growth. Those factors may cushion concerns about higher content spending. Article: Will Content Capex Weigh on Netflix’s Free Cash Flow Trajectory?
• Neutral Sentiment: A steep valuation reset has left Netflix trading at a much lower earnings multiple than before. That may offer value support, though it does not by itself resolve concerns about the business outlook. Article: Netflix trades under 18x earnings after a steep valuation reset
• Negative Sentiment: Investors are concerned that rising content investment could weigh on Netflix’s free cash flow, even with strong cash generation. The spending may be harder to justify if engagement and growth are slowing. Article: Will Content Capex Weigh on Netflix’s Free Cash Flow Trajectory?

Analysts Set New Price Targets

NFLX has been the topic of several recent research reports. Oppenheimer reissued an “outperform” rating and issued a $80.00 price target (down from $85.00) on shares of Netflix in a research note on Wednesday, October 21st. Itau BBA Securities decreased their price objective on Netflix from $151.40 to $96.00 and set an “outperform” rating for the company in a report on Wednesday, August 5th. Deutsche Bank set a $93.00 target price on Netflix in a research report on Wednesday, October 21st. Pivotal Research restated a “hold” rating and issued a $65.00 target price (down from $70.00) on shares of Netflix in a research note on Wednesday, October 21st. Finally, Jefferies Financial Group set a $85.00 target price on Netflix and gave the company a “buy” rating in a research note on Thursday, October 15th. Two analysts have rated the stock with a Strong Buy rating, thirty-five have issued a Buy rating, seventeen have issued a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat, the company has an average rating of “Moderate Buy” and a consensus price target of $89.14.

Netflix Stock Down 2.9%

The firm has a fifty day moving average of $70.00 and a 200-day moving average of $80.65. The company has a quick ratio of 1.07, a current ratio of 1.07 and a debt-to-equity ratio of 0.43. The firm has a market cap of $257.43 billion, a P/E ratio of 18.12, a price-to-earnings-growth ratio of 0.93 and a beta of 1.62.

Netflix (NASDAQ:NFLX) last posted its quarterly earnings results on Tuesday, October 20th. The Internet television network reported $0.87 earnings per share for the quarter, beating analysts’ consensus estimates of $0.82 by $0.05. Netflix had a return on equity of 42.69% and a net margin of 29.69%. The firm had revenue of $12.87 billion during the quarter, compared to the consensus estimate of $12.87 billion. During the same period last year, the company earned $0.59 earnings per share. The business’s revenue was up 11.9% compared to the same quarter last year. On average, equities research analysts anticipate that Netflix, Inc. will post 3.59 earnings per share for the current year.

Insider Buying and Selling

In other news, Director Bradford Smith sold 17,980 shares of Netflix stock in a transaction dated Monday, October 26th. The shares were sold at an average price of $64.03, for a total value of $1,151,259.40. Following the completion of the transaction, the director owned 79,690 shares of the company’s stock, valued at $5,102,550.70. This trade represents a 18.41% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Spencer Neumann sold 9,253 shares of the business’s stock in a transaction dated Wednesday, November 4th. The stock was sold at an average price of $66.15, for a total transaction of $612,085.95. Following the transaction, the chief financial officer owned 73,787 shares in the company, valued at $4,881,010.05. This represents a 11.14% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last quarter, insiders have sold 89,024 shares of company stock worth $5,788,733. Corporate insiders own 1.24% of the company’s stock.

Hedge Funds Weigh In On Netflix

A number of hedge funds and other institutional investors have recently bought and sold shares of NFLX. Clal Insurance Enterprises Holdings Ltd bought a new position in Netflix in the 2nd quarter valued at about $26,000. Pathway Financial Advisers LLC acquired a new position in shares of Netflix in the third quarter valued at approximately $26,000. Sawyer & Company Inc acquired a new position in shares of Netflix in the third quarter valued at approximately $27,000. Compound Global Advisors LLC acquired a new position in shares of Netflix in the second quarter valued at approximately $29,000. Finally, Burnham & Co LLC acquired a new position in shares of Netflix in the second quarter valued at approximately $29,000. Institutional investors own 80.93% of the company’s stock.

Netflix Company Profile

Netflix, Inc. is an entertainment company that offers subscription-based streaming of television series, films, documentaries and other programming. Its service also includes mobile games and, in some markets, advertising-supported viewing plans. Netflix produces and licenses content, including titles made under its Netflix brand. Founded in 1997 by Reed Hastings and Marc Randolph as a DVD-by-mail rental business, the company launched its streaming service in 2007 and later expanded into original programming.