Netflix Shares Fall 25 Percent Ahead of Third Quarter Results

Netflix shares have lost more than 25 percent of their value in 2026 as investors await the company's third-quarter earnings report, scheduled for after the market closes on Tuesday. The streaming company faces concerns about audience viewing habits, intensifying competition and its growth outlook, prompting investors to seek clearer plans from management.

According to Yahoo Finance, Netflix stock closed Friday at approximately $70, down from $93.76 at the end of 2025. The price also stood about 35 percent below its mid-April high, as concerns about weakening viewership weighed on investor sentiment.

Competition from Google's YouTube, which dominates watch time, and the expansion of live sports programming on Amazon Prime Video and HBO Max have added pressure to Netflix's position in the streaming market.

Reuters reported that investors are "expecting details on how the streaming giant plans to sustain growth" following comments from Netflix co-CEO Ted Sarandos about the company's growth trajectory.

Sarandos acknowledged that Netflix's current growth rate falls short of his expectations.

"is not growing as fast as I want us to," said Ted Sarandos, co-CEO of Netflix.

He has identified live programming as a potential growth driver as streaming platforms compete for audiences and viewing time.

Yahoo Finance data shows that analysts expect Netflix to report earnings of $0.82 per share and revenue of $12.88 billion for the third quarter. The revenue estimate represents an increase of approximately 12 percent from the same period a year earlier and closely matches the company's own forecast of $0.82 per share and $12.86 billion in revenue.

The company's previous earnings report disappointed investors. Netflix shares dropped approximately 7 percent on July 17 after second-quarter revenue, reported on July 16, came in slightly below analyst estimates.

Management has introduced organizational changes ahead of the next earnings announcement. Netflix said last Wednesday that it would eliminate 6 percent of its workforce, or approximately 1,000 positions, marking its largest workforce reduction since 2022.

On Friday, the company appointed former Disney executive Peter Rice as its next chief content officer, replacing Bela Bajaria. Netflix shares fell nearly 3 percent that day, according to the source report.

Analysts have also lowered their expectations for the stock. According to Benzinga data, five firms reduced their Netflix price targets in October: Wedbush cut its target to $90 from $105, BMO Capital lowered its target to $125 from $135, KeyBanc reduced its target to $85 from $92, Barclays lowered its target to $70 from $80, and Morgan Stanley cut its target to $80 from $83. All except Barclays maintained a Buy rating or its equivalent.

KeyBanc analyst Justin Patterson outlined four areas he wants management to address: greater content investment, product changes, operating expense reductions and consideration of a dividend. Netflix has never paid a dividend.

Patterson pointed to possible cost savings associated with artificial intelligence as a reason the company could reconsider its spending structure.

"Given the size of the company today and potential savings from AI, we suspect there is room for some degree of expense realignment," wrote Justin Patterson, a KeyBanc analyst.

Yahoo Finance's Brian Sozzi also urged executives to provide substantive answers during Tuesday's earnings call rather than simply repeat prepared remarks.

"This can't be a mailed-in earnings call for Netflix management," said Brian Sozzi of Yahoo Finance.

Sozzi emphasized that investors want direct responses to their concerns about the company's performance and future strategy.

"Don't read off the script, give the Street what it wants," said Brian Sozzi of Yahoo Finance.