Recent earnings reports from streaming giant Netflix had been a volatile rollerocaster: the stock tumbled just over one year ago when the company reported a huge miss in both EPS and new subs, which at 2.2 million was tied for the worst quarter in the past five years, while also reporting a worse than expected outlook for the current quarter. This reversed five quarters ago when Netflix reported a blowout subscriber beat and projected it would soon be cash flow positive, sending its stock soaring to an all time high - if only briefly before again reversing and then tumbling four quarters ago when Netflix again disappointed when it reported a huge subscriber miss and giving dismal guidance, leading to the second quarter when Netflix slumped again after the company missed estimates and guided lower. This again reversed two quarters ago when Netflix soared after it blew away expectations and guided to a blowout Q4, only to plummet last quarter when the company's stock crashed after NFLX reported a dismal subscriber miss for Q4 and gave horrific guidance for the current quarter.
Heading into today's earnings, Netflix gained as much as 4.1% after bouncing off support amid a descending triangle pattern. That said, the long-term uptrend from 2016 is broken as NFLX shares have fallen 37% over the past 52 weeks and are down 40% since the start of 2022, making it the worst performing FANG name of the past year.
While Wall Street is still largely bullish, the number of holds has increased substantially in the past few months as the stock has been cut in half, and analysts today give the stock 31 buys, 17 holds and 3 sells; the average 12-month price target of $499.47 is 44% above the current price. But don't hold your breath for a short squeeze: shares sold short equaled 0.5% of float, according to Markit data, down from 0.59% a month ago...
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