Netflix was the worst-performing stocks in the S&P 500 with more than 60% decline in its stocks in 2022.
With declining subscriber growth as it faces competition from rival streaming services, Netflix's stocks declined more than 6% to just under $226 per share in the beginning of this week.
After gaining more than 40% since hitting a low point in mid-July, Netflix's stock is likely to "underperform" the rest of the market through the end of 2022, opined Kenneth Leon, research director at CFRA Research.
"The key catalyst for Netflix—introducing new ad-pay subscription plans—may not be visible until 2023," said Leon as reported by Forbes.
While Netflix struggled with low operating and free cash flow in the most recent quarter, those metrics should improve, the CFRA analyst predicts, though ongoing challenges to the business include "inflation and lower discretionary consumer spending."
Also, of the nearly 50 Wall Street analysts covering Netflix shares, just under a third still have "buy" ratings on the stock—less than half the amount of nearly a year ago, according to FactSet.
Netflix was doing extremely well in 2020 amid the pandemic, as its stocks jumped nearly 70% that year as stay-at-home measures boosted growth.
Despite the scenario changing in 2022 as investors pull back, Netflix was still one of the best-performing stocks in the S&P 500 as the market rebounded from its low point on 16 June.
However, Netflix's stock has started to decline again in recent sessions.