Netflix Stock Is Sliding Thursday: What's Going On?

Netflix Inc NFLX shares are trading lower Thursday after the company reported mixed quarterly results and issued soft revenue guidance.

• Q2 Revenue: $8.19 billion missed estimates of $8.29 billion
• Q2 EPS: $3.29 beat estimates of $2.85

Paid net adds came in at 5.9 million, well above analyst estimates, driven by the company’s paid sharing rollout to more than 100 countries. Netflix said it’s rolling out paid sharing to almost all remaining countries this week.

The company ended the quarter with 238.39 million global paid subscribers, up 8% year-over-year. 

"While we’ve made steady progress this year, we have more work to do to reaccelerate our growth. We remain focused on: creating a steady drumbeat of must watch shows and movies; improving monetization; growing the enjoyment of our games; and investing to improve our service for members," the company said.

Q3 Outlook: Netflix anticipates third-quarter revenue of approximately $8.52 billion versus estimates of $8.68 billion. The company expects third-quarter earnings to come in at $3.52 per share versus estimates of $3.24 per share. 

"Our updated expectation reflects lower cash content spend in 2023 than we originally anticipated due to timing of production starts and the ongoing WGA and SAG-AFTRA strikes," Netflix said.

"We expect revenue growth will accelerate in the second half of 2023 as monetization grows from our most recent paid sharing launch and we expand our initiative across nearly all remaining countries plus the continued steady growth in our ad-supported plan," the company added.

See Also: Netflix's Password Crackdown Gamble Pays Off: Co-CEO Says, 'Retention Is Quite Good In Essence'

Analyst Assessment: Although there were a few weak spots in the print, several analysts raised price targets Thursday morning.

• Deutsche Bank analyst Bryan Kraft maintained Netflix with a Buy and raised the price target from $475 to $485.
• Piper Sandler analyst Thomas Champion maintained Netflix with a Neutral and raised the price target from $350 to $440.
• Wolfe Research analyst Peter Supino maintained Netflix with an Outperform and raised the price target from $485 to $500.
• Pivotal Research analyst Jeffrey Wlodarczak maintained Netflix with a Buy and raised the price target from $535 to $600.
• B of A Securities analyst Jessica Ehrlich maintained Netflix with a Buy and raised the price target from $490 to $525.
• Rosenblatt analyst Barton Crockett maintained Netflix with a Neutral and raised the price target from $358 to $400.
• Credit Suisse analyst Douglas Mitchelson reiterated Netflix with a Neutral and maintained a $370 price target.
• Wedbush analyst Michael Pachter maintained Netflix with an Outperform and raised the price target from $475 to $525.

NFLX Price Action: Netflix hit 52-week highs on Wednesday ahead of the company's quarterly results.

Netflix shares were down 6.26% at $447.71 at the time of writing, according to Benzinga Pro.

Photo: Tumisu from Pixabay.