New Delhi, Sept. 19 -- Netflix is facing a massive challenge: convincing investors that it can keep producing blockbuster shows that drive engagement and support its valuation.

The streaming giant's shares fell 3.7% to $72.52 before Friday's opening bell, adding to a decline of about 20% this year through Thursday's close.

The latest selloff came after Wells Fargo analyst Steven Cahall downgraded Netflix to underweight and cut his price target to $57 from $80. As per Baron's, the target implies another 25% downside for the stock.

Cahall's concern goes beyond Netflix's share price. The analyst pointed to weakening engagement trends and a shortage of major original series, arguing that the company needs another wave of breakout hits to g...