Traders predict Netflix’s next direction after tomorrow’s earnings release
Netflix (NASDAQ: NFLX ) is heading into its third-quarter earnings release after losing nearly a quarter of its market value in 2026.
The stock closed at $70.53 on October 16, down 24.8% year to date, as investors weighed slowing viewer engagement against continued revenue growth and the expansion of its advertising business.
Netflix stock price chart. Source: Finbold
The bearish sentiment comes as the streaming giant prepares to release its third-quarter 2026 results after the U.S. market closes on Tuesday, October 20. For context, Netflix reported second-quarter revenue of approximately $12.56 billion and earnings per share of $0.80.
In this case, analysts expect earnings per share of $0.82 on revenue of approximately $12.87 billion, representing year-over-year growth of 39% and 11.8%, respectively.
The revenue estimate is slightly above Netflix’s own forecast of $12.86 billion, while the company expects an operating margin of 33.2%, up from 28.2% a year earlier.
The company expects growth from membership gains, subscription price increases and advertising, targeting approximately $3 billion in ad revenue in 2026 after nearly doubling advertiser commitments during its U.S. upfront sales.
However, engagement remains a concern as U.S. viewers spend nearly twice as much time on YouTube as on Netflix, according to Nielsen data . Netflix has also cut approximately 1,000 jobs as it seeks to control costs, leaving investors focused on updates around advertising, content spending and live programming.
Options traders expect a sharp reaction to earnings, with pricing implying a move of approximately 9% in either direction. Based on the last closing price, that translates to roughly $64 on the downside or $77 on the upside.
Traders set Netflix price after earnings
To assess how Netflix stock might trade after the earnings report, Finbold examined Polymarket data , where traders have priced in different scenarios for the week ending October 23.
Traders assign a 68% probability to NFLX finishing the week above $70, while the probability of a close above $80 stands at 12%.
Netflix stock price prediction. Source: Polymarket
The market prices in an 89% chance of shares finishing above $60 and an 80% chance of closing above $50. The odds fall to 5% for the $90 threshold, while the $100 contract stands at 19%. The market assigns a 2% probability to shares finishing above $110 and 1% each for the $120 and $130 thresholds.
Meanwhile, the $10 and $20 thresholds each carry a 99% probability, while $30 stands at 98% and $40 at 82%. However, probabilities for $90 and $100 are inconsistent, as finishing above $100 would also satisfy the $90 threshold.
Overall, the market suggests traders are more confident in Netflix remaining above $60 to $70 than rallying beyond $80 by October 23.
A strong report and reassuring guidance could support a recovery, while disappointing results or weaker engagement trends could push shares lower.
Featured image via Shutterstock
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