Netflix (NASDAQ:NFLX) Trading Down 2% – Should You Sell?

Netflix, Inc. (NASDAQ:NFLX) shares were down 2% during trading on Friday . The company traded as low as $71.11 and last traded at $71.71. 35,753,002 shares were traded during mid-day trading, a decline of 22% from the average session volume of 45,872,523 shares. The stock had previously closed at $73.17.

Trending Headlines about Netflix

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Netflix agreed to a five-year, approximately $500 million licensing deal covering all 371 episodes of The Walking Dead universe in international markets. The agreement strengthens Netflix’s global content lineup and adds a recognizable franchise beginning in 2027. Los Angeles Times article
• Positive Sentiment: Walmart-owned Flipkart is offering qualifying loyalty members a monthly Netflix mobile subscription after four orders in a month. The partnership could support customer acquisition and engagement in India, although the direct financial impact appears limited. Reuters article

Analysts Set New Price Targets

NFLX has been the topic of a number of research analyst reports. CLSA began coverage on shares of Netflix in a report on Monday, July 20th. They issued an “outperform” rating on the stock. Citizens Jmp reiterated a “market perform” rating on shares of Netflix in a report on Wednesday, April 15th. Robert W. Baird set a $90.00 price target on Netflix and gave the stock an “outperform” rating in a research report on Wednesday, July 22nd. Erste Group Bank lowered Netflix from a “buy” rating to a “hold” rating in a research note on Monday, April 27th. Finally, KeyCorp reaffirmed an “overweight” rating and issued a $92.00 price objective (down from $115.00) on shares of Netflix in a research report on Monday, July 13th. Four investment analysts have rated the stock with a Strong Buy rating, thirty-three have given a Buy rating, seventeen have given a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average target price of $103.48.

Netflix Trading Down 2.0%

The company has a market cap of $298.60 billion, a price-to-earnings ratio of 22.57, a PEG ratio of 0.90 and a beta of 1.52. The company has a current ratio of 1.14, a quick ratio of 1.14 and a debt-to-equity ratio of 0.39. The business’s 50 day moving average price is $76.66 and its 200-day moving average price is $85.41.

Netflix (NASDAQ:NFLX) last announced its quarterly earnings results on Thursday, July 16th. The Internet television network reported $0.80 EPS for the quarter, beating analysts’ consensus estimates of $0.79 by $0.01. The business had revenue of $12.56 billion for the quarter, compared to analyst estimates of $12.58 billion. Netflix had a net margin of 28.22% and a return on equity of 40.02%. Netflix’s quarterly revenue was up 13.4% on a year-over-year basis. During the same quarter in the prior year, the business earned $0.72 EPS. On average, equities analysts anticipate that Netflix, Inc. will post 3.59 EPS for the current fiscal year.

Insider Activity at Netflix

In other news, CEO Gregory K. Peters sold 27,312 shares of the stock in a transaction that occurred on Thursday, May 7th. The stock was sold at an average price of $88.69, for a total transaction of $2,422,301.28. Following the transaction, the chief executive officer owned 120,931 shares in the company, valued at approximately $10,725,370.39. This trade represents a 18.42% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, Director Bradford L. Smith sold 35,990 shares of Netflix stock in a transaction that occurred on Wednesday, June 17th. The stock was sold at an average price of $77.52, for a total value of $2,789,944.80. Following the sale, the director directly 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 disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders have sold 492,289 shares of company stock valued at $42,186,530. Insiders own 1.24% of the company’s stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently added to or reduced their stakes in NFLX. Vanguard Group Inc. lifted its holdings in shares of Netflix by 912.5% during the fourth quarter. Vanguard Group Inc. now owns 390,014,981 shares of the Internet television network’s stock worth $36,567,805,000 after buying an additional 351,493,659 shares in the last quarter. State Street Corp boosted its position in shares of Netflix by 927.6% in the fourth quarter. State Street Corp now owns 176,780,995 shares of the Internet television network’s stock valued at $16,574,986,000 after acquiring an additional 159,578,053 shares during the period. Geode Capital Management LLC boosted its position in shares of Netflix by 892.0% in the fourth quarter. Geode Capital Management LLC now owns 99,598,678 shares of the Internet television network’s stock valued at $9,305,336,000 after acquiring an additional 89,558,684 shares during the period. Capital World Investors grew 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 grew 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 institutional investors and hedge funds.

About Netflix

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.