Netflix Inc. (NASDAQ:NFLX) Executive Chairman Reed Hastings has sold a significant portion of his company shares, according to the latest SEC filing. Hastings completed multiple transactions that resulted in the sale of shares totaling over $15 million. These sales were executed at varying prices, ranging from $664.7776 to $674.89.
The transactions took place on July 1, 2024, and were reported in a Form 4 filing with the SEC on the following day. Hastings, who also serves as a director and officer of Netflix, carried out the sales under a pre-arranged Rule 10b5-1 trading plan, which was adopted on August 8, 2023. This type of trading plan allows corporate insiders to sell shares over a predetermined period of time, providing a defense against accusations of trading on nonpublic information.
The Form 4 filing revealed a series of sales: 871 shares at an average price of $664.7776, 1892 shares at $665.7836, 1747 shares at $666.8378, 1206 shares at $667.7516, 1580 shares at $668.9746, 2326 shares at $670.0682, 3084 shares at $671.0602, 4028 shares at $672.1823, 3200 shares at $673.3247, and 2313 shares at $673.9656. Additionally, 279 shares were sold at a price of $674.89.
While Hastings was selling shares, he also acquired 22,526 shares of Netflix common stock through the exercise of options at a price of $55.4871, totaling approximately $1.25 million. However, the overall activity resulted in a substantial reduction of his direct holdings in the company.
Investors often scrutinize the buying and selling activities of company executives as it may provide insight into their confidence in the company's future prospects. Reed Hastings' transactions are part of regular stock trading plans and do not necessarily indicate a change in his outlook for Netflix.
As of the last transaction reported on the filing, Hastings' direct ownership in Netflix stands at a relatively small number of shares, with a substantial portion of his interest in the company held indirectly through a trust. The filing noted that Hastings is the trustee of the Hastings-Quillin Family Trust, which owns 2,991,541 shares of Netflix common stock.
Shareholders and potential investors in Netflix can access full details of the transactions upon request, as the reporting person undertook to provide full information regarding the number of shares and prices at which the transactions were effected.
In other recent news, Netflix has seen a surge of positive analyst adjustments. Argus has raised the streaming giant's share target to $767 from $660, maintaining a Buy rating, influenced by Netflix's recent NFL deal and new strategic initiatives, including the venture into live sports programming. Argus projects an earnings per share (EPS) of $18.35 for 2024 and $20.42 for 2025, indicative of a long-term EPS growth rate of 15%.
In addition, Loop Capital has increased Netflix's price target from $700 to $750, citing strong viewership trends and an anticipated price hike for its Standard Tier subscription. Evercore ISI has also raised its price target for Netflix shares from $650 to $700, reflecting a high single-digit percentage upside to the consensus earnings per share estimates for 2025.
On another note, the International Alliance of Theatrical Stage Employees (IATSE) has announced a tentative three-year agreement with the Alliance of Motion Picture and Television Producers (AMPTP), which includes significant pay increases and terms regulating the use of artificial intelligence (AI) in the industry. The deal is set to be ratified by IATSE members, who work across Hollywood productions.
Finally, Evercore ISI has updated its financial outlook for Magnite, a leading provider of advertising technology solutions, increasing the stock's price target to $15 from the previous $13, following Magnite's recently announced partnership with Netflix.
InvestingPro Insights
Netflix Inc. (NASDAQ:NFLX) continues to captivate the market with its performance, and recent activities by executives such as Reed Hastings can offer a glimpse into the company's current valuation and potential. Here are some key insights based on the latest data from InvestingPro:
InvestingPro Data indicates that Netflix has a market cap of $292.9 billion, reflecting its significant presence in the entertainment industry. The company's P/E ratio stands at 45.51, suggesting a high valuation relative to earnings. However, it's worth noting that the PEG ratio, which considers near-term earnings growth, is at a more moderate 0.83. This aligns with one of the InvestingPro Tips, indicating that Netflix is trading at a low P/E ratio relative to near-term earnings growth, which could be an attractive point for investors looking for growth potential.
Another notable metric is Netflix's Price / Book ratio, currently at 13.71, which is relatively high and suggests that the company's market valuation is quite aggressive compared to its book value. This could be seen as a reflection of the market's high expectations for future growth and profitability, supported by the company's strong revenue growth of 9.47% over the last twelve months as of Q1 2024.
For those interested in exploring more about Netflix's financial health and market potential, there are additional InvestingPro Tips available. For instance, Netflix is recognized as a prominent player in the Entertainment industry, and its cash flows can sufficiently cover interest payments, indicating financial stability. Moreover, the company has had a high return over the last year and operates with a moderate level of debt.
For a deeper analysis and to access more exclusive insights like these, readers can visit https://www.investing.com/pro/NFLX. There are 16 additional InvestingPro Tips listed, which could be invaluable in making informed investment decisions. Remember to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing even more value to your investment research.
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