Netflix (NASDAQ:NFLX) Shares Down 1.8% Following Analyst Downgrade

Netflix, Inc. (NASDAQ:NFLX)’s share price dropped 1.8% during mid-day trading on Friday after Morgan Stanley lowered their price target on the stock from $83.00 to $80.00. Morgan Stanley currently has an overweight rating on the stock. Netflix traded as low as $70.19 and last traded at $70.30. Approximately 28,971,918 shares were traded during mid-day trading, a decline of 32% from the average session volume of 42,447,590 shares. The stock had previously closed at $71.57.

Other analysts have also issued reports about the stock. Jefferies Financial Group dropped their target price on shares of Netflix from $110.00 to $90.00 and set a “buy” rating for the company in a report on Friday, July 17th. Piper Sandler reaffirmed an “overweight” rating and set a $85.00 price target (down from $115.00) on shares of Netflix in a research report on Friday, July 17th. President Capital dropped their price objective on Netflix from $134.00 to $83.00 and set a “buy” rating for the company in a report on Monday, July 20th. Sanford C. Bernstein started coverage on Netflix in a research report on Monday, September 28th. They issued a “buy” rating on the stock. Finally, Rothschild & Co Redburn reduced their target price on Netflix from $120.00 to $93.00 and set a “buy” rating on the stock in a research note on Tuesday, July 21st. Four research analysts have rated the stock with a Strong Buy rating, thirty-five have issued a Buy rating, fifteen have issued a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat.com, Netflix currently has a consensus rating of “Moderate Buy” and a consensus price target of $94.70.

Insiders Place Their Bets

In other Netflix news, CEO Theodore Sarandos sold 27,312 shares of Netflix stock in a transaction that occurred on Tuesday, August 4th. The stock was sold at an average price of $73.35, for a total transaction of $2,003,335.20. Following the sale, the chief executive officer directly owned 178,954 shares of the company’s stock, valued at approximately $13,126,275.90. The trade was a 13.24% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed 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, insider David Hyman sold 5,723 shares of the company’s stock in a transaction that occurred on Tuesday, August 4th. The stock was sold at an average price of $72.85, for a total value of $416,920.55. Following the transaction, the insider owned 316,100 shares in the company, valued at $23,027,885. This trade represents a 1.78% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 179,045 shares of company stock valued at $13,132,194 over the last ninety days. 1.24% of the stock is owned by corporate insiders.

Netflix News Summary

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Netflix is reportedly considering cutting about 5% of its workforce, potentially around 800 employees. Although the layoffs are unconfirmed, investors may view them as a way to control operating expenses and support the company’s roughly 30% net margin. Netflix layoffs: company planning to cut 5% of workforce
• Positive Sentiment: Morgan Stanley maintained an “overweight” rating on Netflix despite reducing its price target from $83 to $80, implying analysts still see meaningful upside from current levels. Morgan Stanley lowers Netflix price target
• Neutral Sentiment: Netflix received a $2.8 billion termination fee after Paramount abandoned its Warner Bros. pursuit. The payment boosts reported cash flow, but it is a one-time item and does not demonstrate recurring streaming earnings or content-financing capacity. Netflix’s $2.8 Billion Windfall Complicates Its Cash-Flow Story
• Neutral Sentiment: The company plans to pay approximately $200 million for U.S. rights to the 2027 Women’s World Cup. The deal could provide valuable live-sports programming and attract viewers, but it also adds content spending and execution risk. Netflix is paying US$200 million for 2027 Women’s World Cup
• Negative Sentiment: The potential layoffs reinforce concerns that Netflix is responding to intensifying competition, including YouTube, rising content costs and weaker viewer engagement. Netflix has not confirmed the reported cuts, so the announcement remains a headline risk ahead of earnings. Netflix Layoffs Report
• Negative Sentiment: Criticism from Solana co-founder Anatoly Yakovenko of Netflix’s upcoming FTX drama adds a modest reputational risk, though the impact on the company’s financial outlook is likely limited. Netflix Stock Dips after FTX Series Criticism

Hedge Funds Weigh In On Netflix

Several institutional investors and hedge funds have recently added to or reduced their stakes in NFLX. BlackRock Inc. purchased a new position in Netflix during the 2nd quarter valued at about $24,902,221,000. State Street Corp grew its holdings in Netflix by 4.9% in 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 increased its stake in shares of Netflix by 4.3% during the first 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 purchasing an additional 2,376,349 shares in the last quarter. Invesco Ltd. increased its stake in shares of Netflix by 835.9% during 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, Nuveen LLC lifted its holdings in shares of Netflix by 830.1% during the fourth quarter. Nuveen LLC now owns 20,579,000 shares of the Internet television network’s stock valued at $1,929,487,000 after purchasing an additional 18,366,524 shares during the last quarter. Hedge funds and other institutional investors own 80.93% of the company’s stock.

Netflix Stock Down 1.8%

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’s fifty day moving average price is $75.48 and its 200-day moving average price is $81.49. The stock has a market capitalization of $292.72 billion, a PE ratio of 22.13, a price-to-earnings-growth ratio of 0.98 and a beta of 1.62.

Netflix (NASDAQ:NFLX) last posted its quarterly earnings results on Thursday, July 16th. The Internet television network reported $0.80 earnings per share for the quarter, topping the consensus estimate of $0.79 by $0.01. The company had revenue of $12.56 billion for the quarter, compared to the consensus estimate 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% compared to the same quarter last year. During the same quarter in the prior year, the business posted $0.72 EPS. Analysts forecast that Netflix, Inc. will post 3.59 earnings per share for the current year.

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.