Netflix (NASDAQ:NFLX) Shares Gap Down After Earnings Miss

Netflix, Inc. (NASDAQ:NFLX)’s stock price gapped down prior to trading on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $1,241.35, but opened at $1,142.90. Netflix shares last traded at $1,131.37, with a volume of 4,329,698 shares changing hands.

The Internet television network reported $5.87 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $6.88 by ($1.01). Netflix had a net margin of 24.05% and a return on equity of 42.45%. The company had revenue of $11.51 billion during the quarter, compared to analysts’ expectations of $11.52 billion. During the same period last year, the business posted $5.40 earnings per share. The company’s quarterly revenue was up 17.2% on a year-over-year basis. Netflix has set its FY 2025 guidance at EPS. Q4 2025 guidance at 5.450-5.450 EPS.

Wall Street Analyst Weigh In

A number of research analysts have issued reports on the stock. Barclays reaffirmed a “sell” rating and issued a $1,100.00 target price (up from $1,000.00) on shares of Netflix in a report on Wednesday, July 9th. BMO Capital Markets reiterated an “outperform” rating and issued a $1,425.00 price target (up from $1,200.00) on shares of Netflix in a research report on Tuesday, July 15th. Needham & Company LLC reiterated a “buy” rating and issued a $1,500.00 price target on shares of Netflix in a research report on Wednesday. Zacks Research lowered shares of Netflix from a “strong-buy” rating to a “hold” rating in a research report on Monday, September 1st. Finally, Loop Capital upgraded shares of Netflix from a “hold” rating to a “buy” rating and increased their price target for the company from $1,150.00 to $1,350.00 in a research report on Wednesday, September 17th. Two analysts have rated the stock with a Strong Buy rating, twenty-seven have given a Buy rating, eight have given a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat.com, Netflix currently has a consensus rating of “Moderate Buy” and an average price target of $1,341.22.

Insiders Place Their Bets

In other news, Director Reed Hastings sold 42,176 shares of the firm’s stock in a transaction on Wednesday, October 1st. The shares were sold at an average price of $1,171.92, for a total value of $49,426,897.92. Following the transaction, the director owned 394 shares of the company’s stock, valued at approximately $461,736.48. This trade represents a 99.07% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, CEO Theodore A. Sarandos sold 2,026 shares of the firm’s stock in a transaction on Tuesday, August 5th. The shares were sold at an average price of $1,160.62, for a total transaction of $2,351,416.12. Following the completion of the transaction, the chief executive officer directly owned 15,168 shares in the company, valued at approximately $17,604,284.16. This represents a 11.78% decrease in their position. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 104,100 shares of company stock worth $122,710,980. 1.37% of the stock is owned by company insiders.

Institutional Investors Weigh In On Netflix

Several hedge funds and other institutional investors have recently added to or reduced their stakes in NFLX. Brighton Jones LLC increased its stake in Netflix by 5.0% during the 4th quarter. Brighton Jones LLC now owns 5,390 shares of the Internet television network’s stock worth $4,804,000 after buying an additional 257 shares during the period. Revolve Wealth Partners LLC grew its holdings in Netflix by 16.4% during the 4th quarter. Revolve Wealth Partners LLC now owns 1,023 shares of the Internet television network’s stock worth $912,000 after acquiring an additional 144 shares in the last quarter. GAMMA Investing LLC grew its holdings in Netflix by 17.6% during the 1st quarter. GAMMA Investing LLC now owns 9,475 shares of the Internet television network’s stock worth $8,836,000 after acquiring an additional 1,415 shares in the last quarter. AssuredPartners Investment Advisors LLC grew its holdings in Netflix by 3.7% during the 1st quarter. AssuredPartners Investment Advisors LLC now owns 360 shares of the Internet television network’s stock worth $336,000 after acquiring an additional 13 shares in the last quarter. Finally, Ledyard National Bank grew its holdings in Netflix by 4.7% during the 1st quarter. Ledyard National Bank now owns 268 shares of the Internet television network’s stock worth $250,000 after acquiring an additional 12 shares in the last quarter. Hedge funds and other institutional investors own 80.93% of the company’s stock.

Netflix Stock Performance

The company has a market capitalization of $474.38 billion, a price-to-earnings ratio of 46.63, a price-to-earnings-growth ratio of 2.09 and a beta of 1.59. The company has a debt-to-equity ratio of 0.58, a quick ratio of 1.34 and a current ratio of 1.34. The company’s fifty day simple moving average is $1,212.43 and its two-hundred day simple moving average is $1,182.04.

Netflix Company Profile

Netflix, Inc provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. The company also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices.