Analyst: Netflix Stock Due for Rebound

The equity is still trading near levels not seen since early 2018

Deputy Editor
May 16, 2022 at 10:10 AM
facebook X logo linkedin

Streaming giant Netflix Inc (NASDAQ:NFLX) is seeing some positive movement this morning -- up 3% at $193.26 at last check -- following a bull note from Wedbush. The firm upgraded the FAANG concern to "outperform" from "neutral," predicting the company is poised to exceed its second-quarter guidance, thanks in large part to staggering the release dates of hit shows such as "Ozark" and "Stranger Things."

Volatility has plagued Netflix stock for most of 2022, with the shares losing nearly 69% year-to-date. Two notable bear gaps within the last five months have NFLX sitting back below the $200 mark for the first time since January 2018. The first gap occurred after Netflix's fourth-quarter earnings report this January. The company's subsequent trip to the earnings confessional showed a quarterly subscriber loss of 200,000, resulting in the equity's worst session in more than a decade.

Circling back to analyst sentiment, the brokerage bunch is unsurprisingly pessimistic toward NFLX. Of the 30 in coverage, 25 rated the security a "hold" or worse coming into the day, though five still recommend a "strong buy." Meanwhile, the 12-month consensus price target of $338.95 is an 77.4% premium to current levels.

Call traders are targeting NFLX at an elevated clip after the upgrade. In the first hour of today's trading, 31,000 calls have crossed the tape, which is double the intraday average. The most popular contract is the May 200 call, followed by the 225 call from the same monthly series, with new positions being sold to open at both.

A broader look at options traders' sentiment at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows that, while calls outnumber puts on an overall basis, the penchant for bearish bets is notable. In fact, Netflix stock's 50-day put/call volume ratio of 0.80 stands higher than 94% of readings from the past year.

These traders are in luck, too. According to its Schaeffer's Volatility Scorecard (SVS)  tally of 87 out of 100, NFLX has consistently realized bigger returns than options traders have priced in over the last 12 months.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI