Inc. needs to prove that it can produce hit movies and TV series again to stop a slide that has erased more than $135 billion in market value this year.

The streaming giant reports earnings after the close Tuesday, and investors will likely be more more attuned to what content executives say is coming over the next six months than the company’s third-quarter numbers.

The stock is down 26% in 2026, putting Netflix among the 10 worst performers in the technology-heavy Nasdaq 100 Index and on track for its worst year since 2022, and it’s coming off a 14% decline in September. The reason is no secret to anyone following the company — user engagement has stalled due to a lack of popular content despite heavy spending driven by a crowded, competitive entertainment landscape.

Netflix won the fewest Emmy Awards in a decade this year, and the company isn’t growing fast enough, according to Co-Chief Executive Officer Ted Sarandos.

“The content’s getting very expensive, and there’s just still too many players,” said Ken Mahoney of Mahoney Asset Management. “I think there’s so many better tech stories out there than Netflix that have sticky customers.”Netflix is taking steps to improve its content and raise its audience numbers. On Monday, it announced that the head of its film division, Dan Lin, was leaving, and last week replaced its chief content officer, Bela Bajaria, with Peter Rice, the former chairman of Walt Disney Television. The company also plans to cut about 1,000 positions in various departments globally in a bid to reduce costs.

For investors, however, the issue is this earnings report won’t reflect those moves. And even if executives give a solid revenue outlook, it’s unlikely to quell the debate around engagement, according to Bloomberg Intelligence analyst Geetha Raganathan.

“A stronger 4Q slate could revive viewing and ads, but investors will want proof that engagement can improve without derailing margin expansion,” she wrote in an Oct. 19 note. The addition of Rice signals a potential pivot toward “more premium, conversation-driving originals and higher 2027 content spending,” she added.

Analysts following the company expect it to report a 12% rise in revenue in the third quarter to $12.9 billion, and a 39% jump in earnings to 82 cents a share, according to data compiled by Bloomberg. Its gross margin is expected to be 51%, down slightly from the second quarter.

Wall Street remains generally bullish on the stock, with an average price target of about $92 suggesting a 32% rise over the next 12 months. And while sentiment has weakened, with two analysts putting sell-equivalent ratings on the shares in the last month, bulls see a vibe shift coming.

“While total viewing is still weak, quality has improved as reflected in hour/top-10 title and the number of sequels is increasing” through the end of the year, Oppenheimer analysts led by Jason Helfstein wrote in an Oct. 14 note. Three months of US price increases and one month of higher ad rates should give revenue a boost, and the recent headcount reductions will allow for more spending on marketing or content or provide upside to margins, they added.

Management may offer some indications for what it expects in 2027, but the company is unlikely to offer thorough guidance, according to Mark Mahaney of Evercore ISI. He was particularly enthusiastic about Netflix’s recent release of .

“ looks very promising to us,” Mahaney wrote in a note to clients on Oct. 16. “Steinbeck is BACK!”Ad revenue may be more important to investors than audience engagement, according to Wedbush’s Alicia Reese, who says the segment is on track to double to roughly $3 billion in 2026.

“Netflix is actively making changes that should address both its engagement issues and shift dollars from heavy infrastructure to more focused content spend,” Reese wrote in an Oct. 16 note.

One argument for buying the stock would be valuation, considering it’s priced at less than 19 times earnings projected over the next 12 months, the lowest valuation since 2022 and a steep discount to its 10-year average of 49.

That helps explain why KeyBanc Capital Markets analyst Justin Patterson believes the Netflix bear case is already priced into the share price.

“The bear case on slowing engagement and more modest margin expansion is arguably priced in,” he wrote in an Oct. 12 note. “We believe management is aware of these issues, and expect to see corrective action taken across content investment and expense realignment to bolster growth and earnings, and deliver value.”