Why Netflix Shares Are Trading Lower Today

Netflix Inc NFLX is trading lower Wednesday after the company announced third-quarter financial results and issued fourth-quarter guidance below estimates. 

Netflix reported quarterly earnings of $3.19 per share, which beat the estimate of $2.56 per share. The company reported quarterly revenue of $7.48 billion, which was in line with estimates.

Netflix expects fourth-quarter earnings of 80 cents per share versus the estimate of $1.10 per share. The company expects fourth-quarter revenue of $7.712 billion versus the estimate of $7.68 billion.

Netflix reported adding 4.4 million paid net subscribers during the third quarter.

"After a lighter-than-normal content slate in Q1 and Q2 due to COVID-related production delays in 2020, we are seeing the positive effects of a stronger slate in the second half of the year," Netflix said in a letter to shareholders.

"We’re very excited to finish the year with what we expect to be our strongest Q4 content offering yet, which shows up as bigger content expense and lower operating margins sequentially."

Analyst Assessment: Multiple analyst firms weighed in on Netflix following the company's financial results:

• Deutsche Bank analyst Bryan Kraft downgraded Netflix from Buy to Hold and announced a $590 price target.
• Barclays analyst Kannan Venkateshwar maintained Netflix with an Overweight rating and raised the price target from $625 to $675.
• Wells Fargo analyst Steven Cahall maintained Netflix with an Overweight rating and raised the price target from $700 to $800.
• Morgan Stanley analyst Benjamin Swinburne maintained Netflix with an Overweight rating and raised the price target from $675 to $700.
• Cowen & Co analyst John Blackledge maintained Netflix with an Outperform rating and raised the price target from $650 to $750.
• Oppenheimer analyst Jed Kelly maintained Netflix with an Outperform rating and raised the price target from $620 to $750.
• Keybanc analyst Justin Patterson maintained Netflix with an Overweight rating and raised the price target from $670 to $690.
• Stifel analyst Scott Devitt maintained Netflix with a Buy rating and raised the price target from $650 to $690.
• Wolfe Research analyst John Janedis maintained Netflix with an Outperform rating and raised the price target from $625 to $706.
• Canaccord Genuity analyst Maria Ripps maintained Netflix with a Buy rating and raised the price target from $650 to $750.

NFLX Price Action: Netflix has traded as high as $646.84 and as low as $463.41 over a 52-week period.

The stock was down 2.14% at $625.34 at time of publication.

Photo: Tumisu from Pixabay.