Netflix 2022 Performance – What Should Investors Do?

2022 has been brutal for streaming giant Netflix, with stocks dipping more than 60%. What does the future hold for Netflix?

Netflix (NFLX) is becoming synonymous with web series. It has been a favourite for providing valuable content. However, while Netflix is one of the best OTT platforms, it does not have the best stock market performance. 2022 has been harsh for Netflix, with shares plunging more than 60% on Nasdaq and other exchanges in the current year alone.

While it began its 2022 journey with $597 (approx.), currently, it is trading near $225 (approx.) only. However, it is not over for the streaming giant yet. Wall Street analysts have further cautioned the investors that the stock might struggle for the rest of 2022, and they are concerned about the company’s business prospects.

Netflix was one of the worst-performing stocks in the S&P500 on 22nd August 2022 with a fall of 6%.

Furthermore, Research Director at CFRA Research – Kenneth Leon lowered his recommendations on the Netflix stock from ‘hold’ to ‘sell’. However, what caused Netflix to take a dip in the stock market?

What went south for Netflix?

Netflix has struggled with low operating and free cash flows in the last quarter. Furthermore, the slow subscriber growth of the company and stiff competition from rival companies has been making things difficult for the company. While Netflix introduced a new ad-pay subscription plan, the results might not be visible till 2023. The low discretionary consumer spending, along with inflation, has made things difficult.

What do experts say?

Kenneth Leon is not alone! Only 1/3rd of the 50 Wall Street analysts have retained the ‘buy’ rating for the Netflix stocks, less than half of what it used to be a year ago. Over the past six months, most groups are on the sell side, with only hedge funds being the net buyers of this stock. The sellers include private wealth managers and investment advisors.

While Netflix was among the favourite stocks for investors during the COVID-19 pandemic, largely because of the increased number of viewers due to lockdowns, it is time to see what the future holds for Netflix.

In a nutshell

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