Why Netflix Shares Are Diving Today

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

Netflix reported quarterly earnings of $1.33 per share, which beat the estimate of 82 cents per share. The company reported quarterly revenue of $7.71 billion, which came in slightly below estimates.

"Even in a world of uncertainty and increasing competition, we’re optimistic about our long-term growth prospects as streaming supplants linear entertainment around the world," Netflix said.

The streaming company expects first-quarter earnings of $2.86 per share, which is below the estimate of $3.45 per share. Netflix expects first-quarter revenue of $7.903 billion versus the estimate of $8.08 billion.

Related Link: Netflix Falls On Q4 Earnings Results: Here's Why And What Investors Need To Know

Analyst Assessment: Several analyst firms downgraded the stock following Netflix's quarterly results:

• Keybanc analyst Justin Patterson downgraded Netflix from an Overweight rating to a Sector Weight rating.
• Barclays analyst Kannan Venkateshwar downgraded Netflix from an Overweight rating to an Equal-Weight rating and lowered the price target from $675 to $425.
• Credit Suisse analyst Douglas Mitchelson downgraded Netflix from an Outperform rating to a Neutral rating and announced a $450 price target.
• Evercore ISI Group analyst Mark Mahaney downgraded Netflix from an Outperform rating to an In Line rating and lowered the price target from $710 to $525.
• Morgan Stanley analyst Benjamin Swinburne downgraded Netflix from an Overweight rating to an Equal-Weight rating and lowered the price target from $700 to $450.
• Baird analyst William Power downgraded Netflix from an Outperform rating to a Neutral rating and lowered the price target from $575 to $420.
• Truist Securities analyst Matthew Thornton downgraded Netflix from a Buy rating to a Hold rating and lowered the price target from $690 to $470.

NFLX Price Action: Netflix shares are making new 52-week lows.

The stock was down 19.6% at $408.90 at time of publication.

Photo: afra32 from Pixabay.