Netflix investors have had a tough year this year. During the first

quarter, the stock lost a third of its value after announcing its first subscriber loss in over a decade.

It was predicted by Netflix management that the company would lose an additional 2 million paid subscribers in the future. Since Netflix’s stock reached its high last year, it has fallen 77% since that surprisingly weak performance.

It appears there’s light at the end of the tunnel – and it might not be a train. Netflix’s second-quarter results, which were far better than expected, were where all eyes were when it reported its subscriber numbers Tuesday afternoon after the market closed.

So, what’s in the “upside down”?

According to many metrics, Netflix’s growth exceeded investors’ expectations. Analysts had forecast $8 billion in revenue for the company’s second quarter, but it actually generated $7.97 billion, up 8.6% year over year.

Investors expected $2.95 in earnings per share (EPS), but the company achieved $3.20 instead.

Subscription numbers were also better than expected. According to Netflix, it lost 970,000 subscribers over the past three months, far less than the 2 million it expected to lose. Its subscriber accounts grew by 5.5% in the past year. 

A 2% increase in average revenue per membership, excluding exchange rates, was also reported by Netflix. Even though some might argue that the company has diminished in strength in recent years, this illustrates that it still has pricing power.

Do I jump?

There is a long history of Netflix facing challenges and adapting to them. Netflix can reaccelerate its growth in numerous ways, and not all of them must be successful for the company to do so.

Netflix’s stock is valued at roughly three times sales, the lowest valuation since 2013. Investors will likely rate the stock more generously if it were able to accelerate its growth even modestly.