As covered by Jesse last week, Netflix has had a rough ride. The latest earnings have pulled the stock down 60% from this time last year. Is it a good time to buy? Let’s see what the Wall Street analysts think.

Analyst recommendations provided by banks and brokers are a helpful guide in seeing what Wall Street and Institutional Investors think regarding the current price and future outlook of the stocks that they are analysing. The analysis generally consists of in-depth fundamental evaluation of the company’s financial results, management team, industry, competitive forces, and technical factors. The stocks are then assigned a “BUY”, “HOLD”, “SELL” rating to indicate whether the stock is expected outperform, perform in-line, or underperform the market over the next 12 months. This is usually accompanied by a “Target Price”.

This is the latest analyst positioning:

BUY – 29%

HOLD – 62%

SELL – 9%

The 12 month consensus target price is ~$315, which implies a return potential of over 50% from the current price. This is a stark difference from the positioning at the start of the year, which was 73% BUY and a 12M target of ~$680.

Whilst NFLX faces serious challenges in maintaining their subscriber base and managing their costs, the steep decline in such a short amount of time may offer a tempting entry for a recovery trade.

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