TSX drops after Canadian index edges higher in prior session
Investing.com - Erste Group downgraded Netflix (NASDAQ:NFLX) stock rating from Buy to Hold on Friday. The streaming giant, currently trading at $1,089 per share, is considered overvalued according to InvestingPro Fair Value estimates.
The research firm cited Netflix’s comparatively high valuation based on its P/E ratio as a factor limiting the stock’s upside potential, despite the company’s faster revenue and earnings per share growth compared to peers. InvestingPro data confirms this assessment, showing Netflix trading at a P/E ratio of 45.99, with revenue growth of 14.84% over the last twelve months.
Netflix recently maintained its full-year 2025 revenue expectations, forecasting 16% year-over-year growth to $45.1 billion.
The streaming giant slightly lowered its operating margin forecast for the full year 2025, according to Erste Group.
The downgrade comes as Erste Group analyst Hans Engel reassessed Netflix’s growth prospects against its current valuation metrics.
In other recent news, Netflix announced a ten-for-one stock split, approved by its Board of Directors, set to take effect in mid-November 2025. This move will see shareholders receive nine additional shares for each share they own, with trading on a split-adjusted basis beginning shortly thereafter. Despite this development, Netflix reported a 17% year-over-year revenue growth for the third quarter, meeting market expectations. However, the stock experienced a 10% drop, which did not deter Bernstein SocGen Group from maintaining its Outperform rating with a price target of $1,390.00.
Additionally, Benchmark reiterated its Hold rating, noting that Netflix’s operating income could have surpassed forecasts if not for a tax impact in Brazil. TD Cowen also maintained its Buy rating, highlighting that operating income exceeded consensus estimates by 6% when excluding the Brazilian tax charge. KeyBanc continued its Overweight rating with a $1,390.00 price target, despite the stock’s recent underperformance compared to market indices. These developments reflect ongoing analyst confidence in Netflix’s long-term prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.