Zacks Investment Research Downgrades Netflix, Inc. (NFLX) to Hold

Zacks Investment Research cut shares of Netflix, Inc. (NASDAQ:NFLX) from a buy rating to a hold rating in a research note published on Tuesday, July 11th.

According to Zacks, “Netflix will continue to benefit from its focus on original programming and international expansion. Netflix added 4.95 million subscribers in the last reported quarter, taking the total count to 98.75 million. Going ahead, the company expects to add 0.60 million subscribers in the domestic streaming segment and 2.60 million subscribers in the international segment in the second quarter. The company’s efforts to attract viewers through investing in more regional programming should also boost user base. In the past one year, Netflix shares outperformed the Zacks categorized Broadcast Radio/TV industry. But, investments in original/acquired content remain a drag on profitability. We believe that Netflix’s ability to effectively manage costs will dictate its future prospects. Estimates have remained stable ahead of the upcoming earnings release. “

Other equities research analysts have also issued reports about the stock. UBS AG reiterated a buy rating and issued a $175.00 price objective on shares of Netflix in a research report on Tuesday, March 14th. Loop Capital boosted their price objective on shares of Netflix from $162.00 to $172.00 and gave the stock an outperform rating in a research report on Wednesday, April 19th. Needham & Company LLC reiterated a hold rating on shares of Netflix in a research report on Tuesday, April 18th. Canaccord Genuity reiterated a buy rating and issued a $165.00 price objective on shares of Netflix in a research report on Thursday, May 25th. Finally, William Blair reiterated an outperform rating on shares of Netflix in a research report on Thursday, May 25th. Two research analysts have rated the stock with a sell rating, fifteen have issued a hold rating and twenty-nine have assigned a buy rating to the stock. The stock currently has an average rating of Buy and an average target price of $175.13.

Shares of Netflix (NFLX) opened at 171.40 on Tuesday. The firm has a 50-day moving average of $168.76 and a 200 day moving average of $153.74. Netflix has a one year low of $93.26 and a one year high of $191.50. The stock has a market capitalization of $74.00 billion, a price-to-earnings ratio of 208.52 and a beta of 1.02.

Netflix (NASDAQ:NFLX) last posted its quarterly earnings results on Monday, July 17th. The Internet television network reported $0.15 earnings per share for the quarter, missing the Zacks’ consensus estimate of $0.16 by $0.01. Netflix had a return on equity of 12.82% and a net margin of 3.55%. The company had revenue of $2.79 billion for the quarter, compared to analyst estimates of $2.76 billion. During the same period last year, the company earned $0.09 earnings per share. The business’s revenue for the quarter was up 32.3% compared to the same quarter last year. On average, equities research analysts predict that Netflix will post $1.19 EPS for the current year.

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In other Netflix news, CEO Reed Hastings sold 101,815 shares of Netflix stock in a transaction that occurred on Monday, May 22nd. The stock was sold at an average price of $157.13, for a total value of $15,998,190.95. Following the transaction, the chief executive officer now directly owns 101,815 shares of the company’s stock, valued at approximately $15,998,190.95. The sale was disclosed in a document filed with the SEC, which is accessible through this link. Also, Director Richard N. Barton sold 2,000 shares of Netflix stock in a transaction that occurred on Wednesday, June 28th. The stock was sold at an average price of $154.31, for a total value of $308,620.00. Following the completion of the transaction, the director now directly owns 8,012 shares in the company, valued at $1,236,331.72. The disclosure for this sale can be found here. Over the last ninety days, insiders sold 389,801 shares of company stock worth $64,889,201. Company insiders own 4.90% of the company’s stock.

Several hedge funds have recently added to or reduced their stakes in the stock. Almanack Investment Partners LLC. purchased a new stake in Netflix during the second quarter worth about $101,000. Clean Yield Group purchased a new stake in Netflix during the first quarter worth about $103,000. TD Capital Management LLC purchased a new stake in Netflix during the second quarter worth about $105,000. SRS Capital Advisors Inc. boosted its stake in Netflix by 3,361.9% in the first quarter. SRS Capital Advisors Inc. now owns 727 shares of the Internet television network’s stock worth $107,000 after buying an additional 706 shares in the last quarter. Finally, Harfst & Associates Inc. purchased a new stake in Netflix during the first quarter worth about $109,000. Institutional investors and hedge funds own 82.78% of the company’s stock.

About Netflix

Netflix, Inc is a provider an Internet television network. The Company operates through three segments: Domestic streaming, International streaming and Domestic DVD. The Domestic streaming segment includes services that streams content to its members in the United States. The International streaming segment includes services that streams content to its members outside the United States.

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