2. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 109
Year to Date Loss as of August 5: 62.04%
On July 19, Netflix, Inc. (NASDAQ:NFLX) reported earnings for the fiscal second quarter of 2022. The company reported earnings per share of $3.20 and beat EPS estimates by $0.25. The company’s revenue came in at $7.97 billion, short of Wall Street expectations by $63.85 million. The company lost nearly 1 million global subscribers in the second quarter of 2022. As of August 5, Netflix, Inc. (NASDAQ:NFLX) has dipped by 62.04% year to date.
This July, Morgan Stanley analyst Benjamin Swinburne raised his price target on Netflix, Inc. (NASDAQ:NFLX) to $230 from $220 and reiterated an Equal Weight rating on the shares. On July 20, Wedbush analyst Michael Pachter reiterated his Outperform rating and $280 price target on Netflix, Inc. (NASDAQ:NFLX). The analyst said that the company is reacting “appropriately” to macroeconomic headwinds by lowering costs to facilitate slower revenue growth. Pachter also noted that Neflix, Inc. (NASDAQ:NFLX) has directed its focus to free cash flow generation as the company positions itself to drive profitability amid relatively low levels of revenue growth.
At the end of Q1 2022, 109 hedge funds were eager on Netflix, Inc. (NASDAQ:NFLX) and held stakes worth $9.70 billion in the company. This is compared to 113 positions in the previous quarter with stakes worth $14.47 billion. The hedge fund sentiment for the stock is negative.
As of June 30, Gardner Russo & Gardner owns roughly 0.52 million shares of Netflix, Inc. (NASDAQ:NFLX) and is the largest shareholder in the company. The fund’s stakes are valued at $91.08 million.
Here is what Oakmark Funds had to say about Netflix, Inc. (NASDAQ:NFLX) in its “Oakmark Fund” second-quarter 2022 investor letter:
“Netflix‘s stock price was down considerably after providing a weaker than expected outlook for both subscriber growth and profit margins. After meeting with management and scrutinizing our investment thesis, we lowered our estimate of business value to account for the company’s softer near-term guidance. However, we believe the decline in the company’s share price more than adjusts for this. Indeed, Netflix now trades for a discount to the S&P 500 Index on next year’s GAAP earnings despite our view that the company remains a much better than average business run by a highly accomplished management team. We believe the company’s lead in streaming remains intact and we expect terminal operating margins to be substantially higher than they are today. Furthermore, we are encouraged by Netflix’s potential to enhance revenue growth through advertising, the monetization of password sharing and further penetrating international markets.”
