Netflix Inc. has been recently trading near its all-time 52 week high since the company reported its string subscriber growth for the previous quarter. It has been one of the top performing stocks at the S&P for the year, with the stock price increasing an astonishing 130% in current year.
In the weeks after its second quarter financial results for fiscal year 2015, the streaming giant has been going up as the share landed at the receiving point of the shareholders’ bullish gush and buying frenzy. Both investors and analysts continue to guarantee for the performance of company in the future.
When media corps. Like Walt Disney Co. and Time Warne began their descent in August, the streaming giant was supposed as the anti-establishment gamble. Since the stock was extensively insusceptible to the decline in market. In its place, the stock actually went in the other direction, putting off additional gains to its climb so far in 2015, despite the huge drag by the media sector on market.
On Thursday August 20, Netflix stock tumbled 7.84% and reached $112.49 per share at market close, and fell further during after hour trading. The decline suggests that the company ultimately joined the wide decrease in media stocks, marking off its steepest and biggest one day loss since October 16 2014.
On Thursday, Media Corps were the biggest losers in the S&P 500 Index, as the index slump 2.11%. Viacom Inc. Time Warner and CBS Corp. all decline over 5%, after Todd Juenger, an analyst at Sanford C. Bernstein downgraded the media sector. This was because of the concerns that subscription fees and advertising revenues are at risks, as the viewership was lost by Pay-Tv sector.
Up till now, the streaming giant had bolted the fall in media stocks. It appears that it took few days for investors and traders to finalize that Netflix stock has overbought at its existing price levels.
The steep and wide media sell off was started on August 5, when Disney reduced its earnings estimates warning of unsatisfactory subscriber figures, and advertising revenue.
Since the share price had already been increasing at its 52 week high this year, the market sell-off has ultimately nudged the company in a bearish direction.
Wall Street Equity Analysts are still bullish on company’s prospects. Almost 45 of the Street analysts covered the stock of Netflix, out of which 23 gave it a Buy, 16 suggest a Hold, while only 6 assigned a Sell rating. The average stock price target is $117.71, reflecting 4.6% upside potential compared to current stock price.