Netflix (NASDAQ:NFLX) Trading 2.3% Higher – Still a Buy?

Netflix, Inc. (NASDAQ:NFLX)’s stock price traded up 2.3% during mid-day trading on Tuesday . The company traded as high as $79.10 and last traded at $77.77. 35,600,567 shares traded hands during mid-day trading, a decline of 20% from the average daily volume of 44,733,895 shares. The stock had previously closed at $76.02.

Trending Headlines about Netflix

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Bill Ackman returned to Netflix. Pershing Square disclosed a new position after previously selling Netflix at a substantial loss. Ackman now argues that Netflix won the streaming wars and offers an attractive combination of valuation and earnings growth, making his purchase a significant confidence signal for investors. Bill Ackman is Back in Netflix Stock
• Positive Sentiment: Valuation and earnings potential are attracting buyers. Analysts and investor commentary point to double-digit revenue growth, expanding margins, shareholder-friendly buybacks and potential upside from currently depressed levels. Historical evidence also suggests major drawdowns can create favorable long-term entry points for Netflix. Netflix Stock Is Cheap and It Has More Than 70% Upside Potential Here
• Positive Sentiment: Technical momentum improved. Netflix is attempting to reclaim key moving averages after its recent selloff, supporting the view that the stock may be forming a bottom and encouraging short-term trading interest. Is the Bottom in for Netflix Stock?
• Neutral Sentiment: Management philosophy received attention. Cofounder Reed Hastings discussed Netflix’s performance-oriented culture and willingness to make difficult staffing decisions. The comments reinforce the company’s focus on efficiency but do not directly change its financial outlook. Reed Hastings on Netflix’s Management Culture
• Negative Sentiment: Growth and guidance concerns remain. Reports say slowing sales and worries about third-quarter revenue and earnings guidance have weighed on the stock, raising questions about whether the recent decline represents a bargain or a value trap. Why Is Netflix Stock Falling on Monday?
• Negative Sentiment: Insider selling added a cautionary signal. Netflix’s chief financial officer reportedly sold nearly $5.6 million of stock, potentially limiting enthusiasm even though the sale may have been part of a planned transaction. Netflix CFO Dumps Nearly $5.6 Million in Stock

Analysts Set New Price Targets

NFLX has been the topic of a number of recent research reports. Citigroup reaffirmed a “market perform” rating on shares of Netflix in a research report on Monday. TD Cowen lowered their price objective on Netflix from $112.00 to $100.00 and set a “buy” rating on the stock in a research note on Friday, July 17th. Bank of America reaffirmed a “buy” rating and set a $125.00 price objective on shares of Netflix in a report on Monday, May 18th. Piper Sandler reiterated an “overweight” rating and set a $85.00 target price (down from $115.00) on shares of Netflix in a research report on Friday, July 17th. Finally, Pivotal Research reduced their target price on shares of Netflix from $96.00 to $70.00 and set a “hold” rating for the company in a research note on Friday, July 17th. Four analysts have rated the stock with a Strong Buy rating, thirty-three have assigned a Buy rating, seventeen have given a Hold rating and one has given a Sell rating to the company. According to MarketBeat, Netflix currently has a consensus rating of “Moderate Buy” and an average target price of $103.48.

Netflix Stock Performance

The company has a quick ratio of 1.14, a current ratio of 1.14 and a debt-to-equity ratio of 0.39. The company has a market capitalization of $323.95 billion, a PE ratio of 24.49, a PEG ratio of 0.98 and a beta of 1.52. The company has a 50-day moving average price of $74.53 and a two-hundred day moving average price of $84.46.

Netflix (NASDAQ:NFLX) last issued its quarterly earnings data on Thursday, July 16th. The Internet television network reported $0.80 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates 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%.The firm’s quarterly revenue was up 13.4% on a year-over-year basis. During the same quarter in the prior year, the firm posted $0.72 EPS. Analysts predict that Netflix, Inc. will post 3.59 EPS for the current fiscal year.

Insider Buying and Selling

In related news, Director Bradford L. Smith sold 35,990 shares of the business’s stock in a transaction that occurred on Wednesday, June 17th. The shares were sold at an average price of $77.52, for a total transaction of $2,789,944.80. Following the completion of the transaction, the director owned 79,690 shares of the company’s stock, valued at approximately $6,177,568.80. The trade was a 31.11% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Theodore A. Sarandos sold 105,850 shares of the company’s stock in a transaction that occurred on Monday, August 3rd. The stock was sold at an average price of $73.03, for a total transaction of $7,730,225.50. Following the sale, the chief executive officer directly owned 206,266 shares in the company, valued at $15,063,605.98. This trade represents a 33.91% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 600,295 shares of company stock valued at $49,056,671 in the last three months. Insiders own 1.24% of the company’s stock.

Institutional Inflows and Outflows

A number of hedge funds have recently made changes to their positions in the company. Vanguard Group Inc. increased its stake 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 worth $36,567,805,000 after acquiring an additional 351,493,659 shares during the last quarter. BlackRock Inc. bought a new stake in shares of Netflix during the 2nd quarter valued at about $24,902,221,000. State Street Corp grew its holdings 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 purchasing an additional 159,578,053 shares in the last quarter. Geode Capital Management LLC grew its holdings 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 purchasing an additional 89,558,684 shares in the last quarter. Finally, Capital World Investors increased its position 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 worth $8,376,656,000 after purchasing an additional 80,025,890 shares during the last quarter. 80.93% of the stock is currently owned by hedge funds and other institutional investors.

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.