Netflix Inc. (NFLX) stock trades near two-year lows with questions on spending and a weak content lineup for the second half of 2026. The stock declines have attracted attention from a former hedge fund manager.

Netflix shares are experiencing downward pressure. Why is NFLX stock trading lower?

Netflix Stock 'High on the List'

Former hedge fund manager Whitney Tilson told investors that Netflix stock is "high on the list" of stocks being considered by him and his Stansberry Research team.

Tilson credits a recent analyst downgrade and a new show on Netflix as reasons why he's becoming more interested in the streaming stock.

"It dropped 4.7% on Friday to close at $71.79 after Wells Fargo analyst Steven Cahall downgraded the stock from Equal Weight to Underweight," Tilson said in a daily newsletter.

Tilson said the analyst showed concern about viewer engagement and a weak slate of original content for the second half of 2026, two items that could lead to subscribers canceling their Netflix plans.

While each Netflix subscriber will have a different opinion on the content lineup, Tilson shared that he and his wife recently finished watching the fifth season of "Fauda," an Israeli political thriller. Tilson said the show has found strong viewership in some Arab countries, including hitting number one in Lebanon.

"So, my experience and observation of Netflix is inconsistent with Cahall's concerns."

The former hedge fund manager also highlighted that Bill Ackman and Pershing Square recently bought Netflix stock, believing the streaming company is undervalued and the company has won the streaming wars.

Netflix Stock Valuation

Tilson said he pitched the stock at the Value Investing Seminar in Italy back on July 10, when shares traded at $73.37.

"[This] is an A+ financial picture: Netflix continues to grow rapidly, [free cash flow] is soaring, and its balance sheet is strong," Tilson said of Netflix's financials in July.

Netflix stock saw a short run into the low $80s after those July comments before falling near two-year lows. Tilson said the stock was overvalued when it peaked 13 months ago and traded for more than 50 times forward earnings.

"But with the stock down and earnings up, it now trades at only 21.1 times this year's consensus analysts' estimates and 18.8 times next year's."

Tilson said these are "below-market multiples" for a company like Netflix that is "far-above-market-quality."

Netflix will report third-quarter financial results on Oct. 20.

Netflix Stock Price Action

Netflix stock is down 0.05% to $71.83 on Tuesday versus a 52-week trading range of $65.10 to $124.86. Netflix stock is down 21% year-to-date in 2026.