Netflix (NASDAQ:NFLX) Trading Down 7.3% After Analyst Downgrade

Netflix, Inc. (NASDAQ:NFLX) fell 7.3% during trading on Friday after JPMorgan Chase & Co. lowered their price target on the stock from $118.00 to $85.00. JPMorgan Chase & Co. currently has an overweight rating on the stock. Netflix traded as low as $65.08 and last traded at $68.95. 141,335,396 shares changed hands during trading, an increase of 208% from the average session volume of 45,892,918 shares. The stock had previously closed at $74.35.

A number of other brokerages also recently commented on NFLX. Piper Sandler reaffirmed an “overweight” rating and set a $85.00 target price (down from $115.00) on shares of Netflix in a research note on Friday. Bank of America restated a “buy” rating and set a $125.00 price target on shares of Netflix in a report on Monday, May 18th. Deutsche Bank Aktiengesellschaft lifted their price target on shares of Netflix from $98.00 to $100.00 and gave the company a “hold” rating in a research report on Tuesday, April 14th. Sanford C. Bernstein set a $95.00 price objective on Netflix and gave the company an “outperform” rating in a report on Friday. Finally, Wells Fargo & Company set a $80.00 price objective on Netflix and gave the stock an “equal weight” rating in a research report on Friday. Two investment analysts have rated the stock with a Strong Buy rating, thirty-five have assigned a Buy rating and sixteen have given a Hold rating to the company’s stock. According to MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $103.97.

Insider Activity

In related news, CEO Theodore A. Sarandos sold 27,312 shares of the stock in a transaction dated Tuesday, May 5th. The stock was sold at an average price of $87.97, for a total transaction of $2,402,636.64. Following the transaction, the chief executive officer owned 284,804 shares of the company’s stock, valued at approximately $25,054,207.88. This represents a 8.75% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Reed Hastings sold 407,550 shares of the firm’s stock in a transaction dated Friday, May 1st. The shares were sold at an average price of $93.13, for a total value of $37,955,131.50. Following the transaction, the director owned 3,940 shares of the company’s stock, valued at $366,932.20. This trade represents a 99.04% 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. Insiders have sold 899,839 shares of company stock worth $80,141,661 in the last quarter. Insiders own 1.24% of the company’s stock.

Key Netflix News

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Some analysts remain bullish, arguing Netflix still has strong long-term upside from margin expansion, advertising growth, and new engagement-driven content formats. Mark Mahaney Reiterates Buy on Netflix
• Positive Sentiment: Supportive commentary highlighted Netflix’s AI, ads, short-form video, and gaming strategy as potential growth catalysts for monetization and engagement. Ad Engagement & Content Opportunities Offer Bullish Edge for NFLX
• Neutral Sentiment: Several analysts cut price targets but mostly kept buy/overweight or hold ratings, signaling lower near-term expectations rather than a full thesis break. Laura Martin Maintains Buy on Netflix
• Negative Sentiment: Netflix’s weaker Q3 outlook and reduced engagement disclosure sparked concern that growth is slowing and management is becoming less transparent with investors. Netflix third-quarter earnings forecast falls shy of Wall Street expectations
• Negative Sentiment: Coverage across the market emphasized the post-earnings selloff, citing a revenue miss, soft guidance, and investor worries about future growth and competition. U.S. Chip Stocks Extend Slide; Netflix Tumbles on Growth Warning

Institutional Investors Weigh In On Netflix

Several large investors have recently added to or reduced their stakes in the business. Vanguard Group Inc. boosted its position in Netflix by 912.5% in the 4th quarter. Vanguard Group Inc. now owns 390,014,981 shares of the Internet television network’s stock valued at $36,567,805,000 after buying an additional 351,493,659 shares during the period. State Street Corp increased its position in shares of Netflix by 927.6% during the fourth quarter. State Street Corp now owns 176,780,995 shares of the Internet television network’s stock worth $16,574,986,000 after acquiring an additional 159,578,053 shares during the period. Geode Capital Management LLC increased its position in shares of Netflix by 892.0% during the fourth quarter. Geode Capital Management LLC now owns 99,598,678 shares of the Internet television network’s stock worth $9,305,336,000 after acquiring an additional 89,558,684 shares during the period. Capital World Investors raised its stake in shares of Netflix by 859.1% in the fourth quarter. Capital World Investors now owns 89,341,444 shares of the Internet television network’s stock valued at $8,376,656,000 after acquiring an additional 80,025,890 shares in the last quarter. Finally, Morgan Stanley raised its stake in shares of Netflix by 903.0% in the fourth quarter. Morgan Stanley now owns 85,349,973 shares of the Internet television network’s stock valued at $8,002,414,000 after acquiring an additional 76,840,318 shares in the last quarter. 80.93% of the stock is owned by hedge funds and other institutional investors.

Netflix Stock Performance

The stock has a market capitalization of $290.33 billion, a PE ratio of 21.70, a price-to-earnings-growth ratio of 0.95 and a beta of 1.52. The stock has a fifty day moving average of $80.15 and a 200-day moving average of $86.90. The company has a quick ratio of 1.41, a current ratio of 1.41 and a debt-to-equity ratio of 0.43.

Netflix (NASDAQ:NFLX) last released its earnings results on Thursday, July 16th. The Internet television network reported $0.80 EPS for the quarter, topping the consensus estimate of $0.79 by $0.01. The firm had revenue of $12.56 billion during the quarter, compared to analysts’ expectations of $12.58 billion. Netflix had a return on equity of 40.83% and a net margin of 28.22%.Netflix’s revenue for the quarter was up 13.4% on a year-over-year basis. During the same period in the previous year, the firm posted $0.72 EPS. Equities analysts anticipate that Netflix, Inc. will post 3.6 earnings per share for the current fiscal year.

Netflix Company Profile

Netflix, Inc (NASDAQ: NFLX) is a global entertainment company that provides subscription-based streaming of films, television series, documentaries and other video content. Founded in 1997 by Reed Hastings and Marc Randolph and headquartered in Los Gatos, California, the company began as a DVD-by-mail rental service and introduced streaming video in 2007. Netflix later expanded into producing and distributing original programming, beginning notable original hits in the 2010s, and now operates a content production and distribution ecosystem alongside its licensing activity.

The company’s primary product is its on-demand streaming service, which can be accessed on a wide range of internet-connected devices and delivered through a suite of apps and web platforms.