Why Netflix Shares Are Getting Hammered

Netflix Inc NFLX shares are trading lower by 27.60% to $252.39 during Wednesday's pre-market session after the company reported worse-than-expected first-quarter sales results and issued second-quarter EPS and revenue guidance below analyst estimates.

Netflix reported quarterly earnings of $3.53 per share which beat the analyst consensus estimate of $2.90. Netflix also reported quarterly sales of $7.87 billion which missed the analyst consensus estimate of $7.93 billion by 1%. Global streaming paid net additions were down 200 thousand. 

Netflix sees second-quarter revenue of $8.053 billion, below the analyst consensus estimate of $8.21 billion. Netflix also sees EPS of $3.00, below the analyst consensus estimate of EPS of $3.01. Netflix also guided for second-quarter global streaming paid memberships of 219.64 million, which represents a decrease of 2 million from the first quarter.

See Also: Netflix Shares Plunge After Q1 Earnings, First Subscriber Loss Since 2011

Netflix also saw several analyst rating revisions Wednesday morning: 

• JP Morgan analyst Doug Anmuth downgraded Netflix from Overweight to Neutral and announced a $300 price target.
• Atlantic Equities analyst Hamilton Faber downgraded Netflix from Overweight to Neutral and announced a $280 price target.
• Piper Sandler analyst Thomas Champion downgraded Netflix from Overweight to Neutral and lowered the price target from $562 to $293.
• Pivotal Research analyst Jeffrey Wlodarczak downgraded Netflix from Buy to Sell and lowered the price target from $550 to $235.
• Stifel analyst Scott Devitt downgraded Netflix from Buy to Hold and announced a $300 price target.
• UBS analyst John Hodulik downgraded Netflix from Buy to Neutral and announced a $355 price target.
• Barclays analyst Kannan Venkateshwar maintained Netflix with an Equal-Weight and lowered the price target from $380 to $275.
• B of A Securities analyst Nat Schindler downgraded Netflix from Buy to Underperform and lowered the price target from $605 to $300.
• Credit Suisse analyst Douglas Mitchelson maintained Netflix with a Neutral and lowered the price target from $450 to $350.
• Needham analyst Laura Martin upgraded Netflix from Underperform to Hold.
• BMO Capital analyst Daniel Salmon maintained Netflix with an Outperform and lowered the price target from $640 to $405.
• Oppenheimer analyst Jed Kelly downgraded Netflix from Outperform to Perform.

According to data from Benzinga Pro, Netflix has a 52-week high of $700.99 and a 52-week low of $329.82.