The negative momentum continues for Netflix ( NFLX -1.79% ) . Last week, the company announced layoffs of 1,000 employees, amounting to 6% of its headcount. The goal with this cut was likely to drive operational efficiencies.

And this week, Netflix revealed financial results for the third quarter, to the market's disappointment. The big news was the company's expectation for revenue growth to continue decelerating, with the top line forecast to rise 11.5% year over year in the fourth quarter. Shares immediately fell 6% following the news.

The dominant streaming stock currently trades an alarming 51% off its high (as of Oct. 21), which was established 16 months ago in June 2025. History suggests that this is what happens next.

Image source: The Motley Fool.

Past trends support buying the dip

It's extremely challenging for Netflix shareholders to be optimistic about the situation. This feels like uncharted territory since the stock has historically been a monster winner.…