Citi analysts have stated they "remain optimistic" about Netflix despite its underwhelming performance.

"In May, management hinted at potentially launching new membership tiers. This could enable Netflix to segment the market more effectively, aiding revenue growth and reigniting investor interest," Citi wrote in its report. "We believe mergers and acquisitions could help solidify Netflix's intellectual property, which should enhance user engagement and improve operating leverage."

Citi cited factors such as plateauing viewership rates at the streaming platform, potential M&A activity by the company, and shareholder interest in the semiconductor sector as elements that could pressure Netflix's share price.

However, analysts believe Netflix's second-quarter earnings will align with market expectations, with revenue around $12.57 billion, operating profit of approximately $4.11 billion, and earnings per share of 78 cents. Analysts also expect the streaming platform's third-quarter performance and its outlook for fiscal year 2026 to be consistent with guidance.

"We have lowered our target valuation multiple from 28 times 2027 earnings per share to 25 times to reflect multiple compression among mega-cap companies. Consequently, our price target has been reduced from $115 to $100," Citi concluded.