TLDR
- Netflix stock has dropped 40.23% over the past 12 months and is trading below its 200-day moving average
- HSBC downgraded NFLX to “Hold” with a $76 price target; Wells Fargo cut to Underweight with a $57 target
- Evercore ISI raised its price target to $110, saying bad news is already priced in
- Bill Ackman’s Pershing Square disclosed a roughly $1 billion Netflix position
- Analysts see potential recovery through ad-supported expansion, live sports, and mobile-first content
Netflix stock opened at $73.36 on Tuesday, sitting 40.23% below where it traded 12 months ago. The stock is currently priced at around 23 times earnings, down from the 35 to 40 times earnings it commanded at the start of the year.
The stock sits 13.4% below its 200-day simple moving average of $85.30, and also below its 20-day and 50-day moving averages. A “death cross” formed in December 2025, a pattern that typically signals continued downward pressure.
Two downgrades landed this week. HSBC cut Netflix from Buy to Hold, setting a $76 price target that implies only 3.6% upside. Wells Fargo went further, downgrading to Underweight and slashing its target to $57 from $80, citing weak user engagement and fading momentum.
Despite that, the consensus among analysts remains “Moderate Buy,” with an average price target of $95.51.
Bulls Still See a Case
Evercore ISI analyst Mark Mahaney kept his Outperform rating and raised his price target to $110 from $100. He argued on CNBC that the stock entered the year priced for perfection and has since absorbed a wave of bad news.
Mahaney pointed to three potential growth drivers: expanding the ad-supported tier into 15 more international markets, exclusive live sports rights, and new subscriber growth. He specifically called out Netflix’s exclusive World Baseball Classic streaming rights in Japan and upcoming exclusive Women’s World Cup coverage in North America.
Piper Sandler’s Tom Champion also stayed constructive. He noted Netflix already pulled off one business reinvention through its password-sharing crackdown and ad business build-out. His next bet is on “micro-dramas,” short vertical video content built for smartphones, as a way to compete with YouTube and TikTok for off-TV attention.
Ackman Takes a Billion-Dollar Position
Pershing Square disclosed a roughly $1 billion stake in Netflix, a notable vote of confidence from Bill Ackman, who previously lost around $400 million on the stock in 2022.
Earnings and Fundamentals
Netflix’s most recent quarterly earnings showed $0.80 EPS, just above the $0.79 consensus. Revenue came in at $12.56 billion, up 13.4% year over year, though slightly below the $12.58 billion estimate.
The company has a net margin of 28.22% and a return on equity of 40.02%. Institutional investors hold 80.93% of the stock.
CEO Ted Sarandos sold 105,850 shares in early August at $73.03 per share, a 33.91% reduction in his position, executed under a pre-arranged Rule 10b5-1 plan tied to tax obligations. CFO Spencer Neumann also sold 9,248 shares at $75.79 in mid-August.
Key support sits at $71, with the 52-week low at $65.08. Resistance is pegged around $82.50. Netflix’s next earnings report is scheduled for October 20.
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