Netflix (NASDAQ:NFLX) Shares Climb 2.9% – Time to Buy?

Netflix, Inc. (NASDAQ:NFLX) shares traded up 2.9% during trading on Thursday. The stock traded as high as $73.07 and last traded at $72.61. Approximately 40,035,997 shares were traded during mid-day trading, a decline of 5% from the average daily volume of 42,258,301 shares. The stock had previously closed at $70.57.

Key Stories Impacting Netflix

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Jefferies upgraded Netflix (NFLX) to “strong buy,” citing potential support from pricing increases and advertising growth. Wedbush also maintained an “outperform” rating, although it lowered its price target to $90 from $105. Netflix stock gets bullish analyst call
• Positive Sentiment: Options activity is signaling expectations for a substantial post-earnings move, while sentiment remains bullish in some derivatives markets. Technical analysts also see a possible double-bottom pattern, with a break above $83.60 potentially opening a path toward $102.12. Barchart Netflix earnings outlook
• Neutral Sentiment: Netflix is replacing Chief Content Officer Bela Bajaria with former Disney and Fox executive Peter Rice. His experience across scripted programming, live sports, unscripted content and theatrical distribution could help Netflix develop new hits, but the abrupt change before earnings highlights pressure to improve engagement. Netflix appoints Peter Rice
• Negative Sentiment: Netflix announced plans to eliminate about 1,000 jobs, or 6% of its workforce, one day before the content-chief transition. Although the cuts may improve efficiency, investors viewed them as evidence of a sharper growth reset and concerns about the company’s content strategy. Netflix shares under pressure after content chief departure
• Negative Sentiment: Pre-earnings concerns include slowing viewership, rising churn, declining engagement and intensifying competition. Analysts also warn that Netflix’s premium valuation leaves little room for disappointing guidance, while options traders anticipate a move that could take the stock toward a two-year low. Netflix Q3 earnings outlook

Analyst Ratings Changes

A number of equities research analysts recently commented on the company. Phillip Securities upgraded Netflix from a “moderate buy” rating to a “strong-buy” rating and set a $110.00 price target on the stock in a research report on Sunday, July 19th. DZ Bank reaffirmed a “buy” rating on shares of Netflix in a report on Monday, July 20th. Seaport Research Partners downgraded Netflix from a “buy” rating to a “neutral” rating in a research report on Monday, July 20th. TD Cowen reaffirmed a “buy” rating and issued a $100.00 target price on shares of Netflix in a research note on Monday, October 5th. Finally, Daiwa Securities Group reduced their target price on shares of Netflix from $102.00 to $76.00 and set an “outperform” rating on the stock in a research report on Wednesday, July 22nd. 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 company. According to MarketBeat.com, the company has an average rating of “Moderate Buy” and a consensus target price of $93.82.

Netflix Stock Performance

The stock’s 50-day moving average is $75.17 and its 200 day moving average is $80.66. The firm has a market cap of $293.68 billion, a P/E ratio of 22.20, a PEG ratio of 1.02 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.

Netflix (NASDAQ:NFLX) last released its quarterly earnings data on Thursday, July 16th. The Internet television network reported $0.80 earnings per share for the quarter, beating the consensus estimate of $0.79 by $0.01. The business had revenue of $12.56 billion for the quarter, compared to analysts’ expectations of $12.58 billion. Netflix had a return on equity of 40.02% 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 quarter in the previous year, the business posted $0.72 EPS. On average, research analysts predict that Netflix, Inc. will post 3.59 earnings per share for the current year.

Insider Buying and Selling

In related news, CEO Gregory K. Peters sold 27,312 shares of the firm’s stock in a transaction on Thursday, August 6th. The shares were sold at an average price of $73.54, for a total value of $2,008,524.48. Following the completion of the transaction, the chief executive officer owned 120,931 shares of the company’s stock, valued at approximately $8,893,265.74. This trade represents a 18.42% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, insider David A. Hyman sold 5,723 shares of Netflix stock in a transaction dated Tuesday, August 4th. The shares were sold at an average price of $72.85, for a total value of $416,920.55. Following the completion of the sale, the insider directly owned 316,100 shares in the company, valued at approximately $23,027,885. This represents a 1.78% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last quarter, insiders sold 179,045 shares of company stock valued at $13,132,194. Corporate insiders own 1.24% of the company’s stock.

Institutional Trading of Netflix

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. BlackRock Inc. acquired a new position in shares of Netflix during the 2nd quarter worth about $24,902,221,000. State Street Corp increased its holdings in shares of Netflix by 4.9% during the second quarter. State Street Corp now owns 180,129,582 shares of the Internet television network’s stock worth $12,861,252,000 after purchasing an additional 8,474,820 shares during the period. Bank of America Corp DE raised its holdings in Netflix by 4.3% in the 1st quarter. Bank of America Corp DE now owns 57,942,812 shares of the Internet television network’s stock valued at $5,571,201,000 after acquiring an additional 2,376,349 shares in the last quarter. Invesco Ltd. raised its stake in Netflix by 835.9% in the fourth quarter. Invesco Ltd. now owns 43,462,696 shares of the Internet television network’s stock valued at $4,075,062,000 after purchasing an additional 38,818,947 shares in the last quarter. Finally, Bank of New York Mellon Corp bought a new position in Netflix in the second quarter valued at approximately $1,906,482,000. 80.93% of the stock is owned by institutional investors.

Netflix Company Profile

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.