There's no denying that Netflix (NFLX 1.84%) investors are in a bad place these days. Shares of the company behind the leading streaming service have been cut in half -- down 51% -- since peaking north of $700 just five months ago. 

Netflix stock will be on the move this week. It reports financial results for its first quarter shortly after the market closes on Tuesday. Will the shares keep sinking with another uninspiring report, or has Netflix fallen so far down that even a ho-hum performance will send the stock higher?

Let's get you up to speed ahead of an important event for the company that put premium video streaming on the map more than a dozen years ago.

A person channel surfing with a layer of concern.

Image source: Getty Images.

Bad momentum

The last time Netflix posted fresh financials, it didn't go so well. The stock plummeted 22% the day after it posted its fourth-quarter results in mid-January. Netflix fell just short of the revenue and subscriber guidance it unveiled three months earlier. It's a stunning shortfall, since the fourth quarter delivered Squid Game, the most-watched TV series on the platform, as well as its two most-viewed films with Red Notice and Don't Look Down

Netflix held up better on the bottom line, but its guidance also proved problematic. After adding nearly 8.3 million subscribers during the fourth quarter, Netflix was modeling just 2.5 million in net additions through the first three months of this year. Seasonality is a factor, but Netflix still tacked on nearly 4 million net streaming additions worldwide in the first quarter of last year. 

It's not just the subscriber growth guidance that proved to be concerning earlier this year. Netflix saw 10% in year-over-year revenue growth for the first quarter that it will make official on Tuesday afternoon, its weakest top-line showing since 2012. Analysts figured that they were playing it safe with a 13% increase heading into the January financial update, but that wasn't the case. The earnings outlook at the time called for a profit of $2.86 a share, well below both the $3.75 it earned a year earlier and the $3.45 the Wall Street pros were expecting. 

Where do those same analysts stand now, heading into the actual moment of truth? The consensus estimate calls for Netflix to earn $2.90 a share, just ahead of the company's own target. Wall Street's betting on revenue to climb by a slightly better-than guided 10.7% to hit $7.93 billion. Three months ago, Netflix was forecasting $7.903 billion on the top line.

Netflix is no longer a lock to lowball its reality. It has fallen short on subscriber guidance five times over the past three years. But it has increased prices in the U.S. and other select markets, and if customers don't flinch, we could be eyeing a healthy quarter with an even heartier outlook for the current period. 

It's probably too soon for some recent Netflix initiatives in gaming and e-commerce to start paying off, but Netflix could also offer some encouraging words on that front. The stock has been shaved in half since mid-November. It's not going to take a lot of good -- or even not-so-bad -- news to send the shares higher.

Netflix is also surprisingly cheap, even on an earnings basis. Netflix is not trading for 24 times next year's projected earnings. Even with the platform investing heavily in fresh content, there are plenty of analysts out there seeing a strong recovery on the bottom line starting in the second half of this year. This is still a growth niche, and Netflix remains the lead horse among streaming services stocks. Expectations and market enthusiasm may be low heading into this week's critical performance update, but Netflix has a history of making naysayers pay for dismissing the investment.