Shares of Netflix Inc (NASDAQ:NFLX) are 6% lower to trade at $82.01 at last glance, brushing off a fourth-quarter earnings and revenue beat after the streaming giant also issued a disappointing margin outlook. Concerns around the company's bid to acquire Warner Bros Discovery (WBD) for roughly $83 billion weighed as well.
No fewer than eight analysts have slashed their price targets in response, including HSBC to $106 from $107. Analysts remain optimistic toward NFLX, however, with 27 of the 42 in question sporting a "buy" or better rating, while the 12-month consensus target price of $118.12 is a 41.6% premium to current levels. This means more bear notes could be in store.
NFLX is pacing for a fifth-straight loss and is trading at a 52-week low. Overhead pressure at the 20-day moving average has been guiding the shares lower since November, and capped a rally attempt in December. In the last six moths, the stock has shed nearly 30%.
Despite the negative price action, options traders lean bullish. This is per the security's 50-day call/put volume ratio of 2.70 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than all annual readings. An unwinding of this optimism may have bearish implications for NFLX.
Drilling down to today's options activity, 529,000 calls and 266,000 puts have already crossed the tape, which is four times the intraday average amount. The most popular contract by far is the August 73 put, where new positions are being opened.
