Netflix (NASDAQ:NFLX) Trading Up 2.3% – Time to Buy?

Shares of Netflix, Inc. (NASDAQ:NFLX) shot up 2.3% during trading on Tuesday . The company traded as high as $79.10 and last traded at $77.77. Approximately 35,600,567 shares were traded 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.

Netflix News Summary

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

Analyst Ratings Changes

Several analysts have recently weighed in on the stock. Deutsche Bank Aktiengesellschaft set a $110.00 price objective on shares of Netflix in a research report on Monday, July 20th. Rosenblatt Securities set a $75.00 target price on Netflix and gave the company a “neutral” rating in a research note on Friday, July 17th. Guggenheim set a $75.00 price target on Netflix and gave the company a “buy” rating in a research report on Friday, July 17th. UBS Group dropped their price target on Netflix from $130.00 to $115.00 and set a “buy” rating for the company in a research note on Friday, July 17th. Finally, TD Cowen dropped their price target on Netflix from $112.00 to $100.00 and set a “buy” rating for the company in a research note on Friday, July 17th. Four research analysts have rated the stock with a Strong Buy rating, thirty-three have assigned a Buy rating, seventeen have issued a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and an average price target of $103.48.

Netflix Trading Up 2.3%

The stock has a market capitalization of $323.95 billion, a P/E ratio of 24.49, a price-to-earnings-growth ratio of 0.98 and a beta of 1.52. The stock’s fifty day moving average price is $74.53 and its two-hundred day moving average price is $84.46. The company has a current ratio of 1.14, a quick ratio of 1.14 and a debt-to-equity ratio of 0.39.

Netflix (NASDAQ:NFLX) last released its earnings results on Thursday, July 16th. The Internet television network reported $0.80 EPS for the quarter, beating the consensus estimate of $0.79 by $0.01. The company 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%. The firm’s quarterly revenue was up 13.4% compared to the same quarter last year. During the same quarter last year, the firm earned $0.72 EPS. Equities research analysts forecast that Netflix, Inc. will post 3.59 EPS for the current year.

Insider Transactions at Netflix

In related news, CEO Theodore A. Sarandos sold 105,850 shares of the stock in a transaction dated 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 completion of the sale, the chief executive officer directly owned 206,266 shares in the company, valued at $15,063,605.98. This represents a 33.91% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. 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. Also, Director Bradford L. Smith sold 35,990 shares of the firm’s 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 transaction, the director owned 79,690 shares in the company, valued at approximately $6,177,568.80. The trade was a 31.11% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 600,295 shares of company stock valued at $49,056,671. 1.24% of the stock is currently owned by corporate insiders.

Institutional Trading of Netflix

Several hedge funds and other institutional investors have recently bought and sold shares of NFLX. Turning Point Benefit Group Inc. increased its stake in shares of Netflix by 13,400.0% in the fourth quarter. Turning Point Benefit Group Inc. now owns 270 shares of the Internet television network’s stock worth $25,000 after buying an additional 268 shares during the period. Imprint Wealth LLC purchased a new stake in Netflix during the 3rd quarter valued at $25,000. Cornerstone Financial Management LLC bought a new stake in Netflix in the 4th quarter worth $26,000. Clal Insurance Enterprises Holdings Ltd purchased a new position in shares of Netflix in the second quarter valued at about $26,000. Finally, Atlas Capital Advisors Inc. purchased a new position in shares of Netflix in the fourth quarter valued at about $26,000. Institutional investors own 80.93% of the company’s stock.

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.