NFLX has struggled to recover from a rough October
The shares of Netflix, Inc. (NASDAQ:NFLX) are down 3% to trade at $309.33 amid a flurry of headlines. First, Walt Disney (DIS) unveiled the details of its service that will be a direct competitor to Netflix. Plus, Nintendo said its Wii device won't be supporting the Netflix app next year. And to top it all off, the FAANG name is being sued by the Satanic Temple.
On the charts, Netflix boasts a 62% lead in 2018, but hit a rough patch last month amid the broad market sell-off. While the shares bounced from the $280 level in late October, they have recently found resistance at their 30-day moving average. This trendline has alternated between support and resistance throughout 2018.
Despite some recent bear notes, analysts for the most part aren't panicking. Of the 33 brokerages covering the FAANG stock, 23 rate it a "buy" or better, and the average 12-month price target of $399.78 is a 30% premium to today's perch. The sentiment is similar among short sellers, with a meager 4% of NFLX's total available float sold short.
Options traders are upbeat, too. This is based on the security's 50-day put/call volume ratio of 1.64 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), high enough to rank in the 91st annual percentile.
Meanwhile, Netflix stock's 30-day IV skew of 16.3% ranks in the 94th percentile of its 12-month range, indicating near-term calls are cheaper than their put counterparts, from a volatility perspective. Plus, the stock's Schaeffer's Volatility Scorecard (SVS) reading arrives at 94 (out of a possible 100). This means Netflix has tended to make outsized moves over the past year, relative to what the options market has priced in -- a boon to premium buyers.