NFLX heads into the final stretch before its July 16 Q3 earnings with the stock cheaper than last week, the short book marginally lighter, and options traders turning slightly more constructive — a small but notable shift from the relentless drift that defined the past two months.
The stock closed at $78.72 on June 16, down 3.6% on the day and 3.3% on the week. That marks another leg lower from the $80.34 level flagged in last week's report, itself already well below April's pre-earnings highs. The cumulative damage since April remains severe. Yet the short-side story has quietly changed direction. Short interest eased to 2.35% of free float — down fractionally on the day and slightly below the 2.38% peak that had built through early June. The one-month growth trajectory still shows an 8% rise in shares short, so bears remain more convicted than they were in May. The borrow market offers no friction to either side: availability runs near 9,650% of current short interest, meaning roughly 97 shares are available for every one already borrowed. Cost to borrow has actually fallen, dropping 8% on the week to just 0.38% — the lowest reading in the past 30 days. Bears can still build cheaply and easily, but the marginal move this week was to trim, not add.
Options positioning has shifted modestly in the same direction. The put/call ratio of 0.80 is now running slightly below its 20-day average of 0.84 — a mild lean toward calls rather than puts, and a Z-score of -0.95. That is not a dramatic signal, but it contrasts with the more defensive posture visible in prior weeks when the PCR touched 0.91. Taken together, the lending and options data point to positioning that is cautious but not aggressively bearish — a cooling rather than a capitulation.
The Street remains uniformly above the market. The consensus mean target of $114 implies roughly 45% upside from current levels. The lowest published target on the board — Rosenblatt's Neutral-rated $95 — still sits nearly 21% above where the stock trades. Recent analyst activity has been quiet: BofA's Jessica Reif Ehrlich reiterated Buy with a $125 target in mid-May, and Guggenheim held its $120 Buy. The April post-earnings cluster saw a mix of target cuts (Oppenheimer lowered to $120, Barclays trimmed to $110) alongside a raise from Piper Sandler to $115. No firm has downgraded. The bull case rests on ad-tier monetization, global subscriber runway, and gaming optionality. The bear case centers on a 33x forward P/E that prices in perfection, slowing revenue growth, and rising content costs. The PE multiple has compressed roughly 3 points over the past month to 21.3x on trailing earnings, reflecting the price move rather than any fundamental reset — EV/EBITDA sits near 18.2x.
Insider activity adds a layer of texture. Founder and Chairman Reed Hastings sold approximately $33 million of stock on June 1, the largest single insider transaction in the recent window. Co-CEO Greg Peters and CFO Spencer Neumann also sold in early May. All trades carry low significance scores and are consistent with pre-arranged plans, but the net 90-day insider flow is firmly negative: roughly $45 million in net sales. There are no buyers on the inside. That does not by itself explain the stock's weakness — these are large-holder executives managing concentrated positions — but it provides no contrarian anchor either.
Peer context is marginally supportive. IMAX gained nearly 9% on the week and CNK added 3%, suggesting some appetite for entertainment-adjacent names. SPOT fell 5.3%, tracking more closely with NFLX's direction. The ORTEX short score has edged down from 32.6 to 32.4 over the past week — a small move but in the direction of less bearish pressure. The July 16 earnings print is now the organizing event: everything in the intervening weeks — any subscriber data points, content slate news, or macro developments — will be measured against what that report needs to deliver to close the gap between market price and Street conviction.
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