Netflix stock hit nearly a two-year low Friday, already down 16% in 2022. This discouraging news comes in the wake of Netflix’s Q4 earnings report which shows the service underperformed expectations.
Top executives at Netflix haven’t been able to pinpoint exactly why the numbers are so daunting, but in the words of Co-CEO Reed Hastings, “For now, we are just staying calm.”
Netflix expects to add 2.5 million more subscribers in the first quarter of this year, well below the 3.98 million it added in Q1 2021. The company lists competition as the reason for the less optimistic numbers for 2022.
Analysts are revising their predictions for Netflix in 2022, with Michael Nathanson of MoffetNathanson estimating Netflix could potentially add merely 6 million to 11 million net new subscribers in 2022. He also lowered his 12-month price target for Netflix stock to $375 from $460.
Netflix’s largest subscriber base comes from the U.S. and Europe, but now seems to be saturated in those regions with little room for growth. The streamer’s recent delve into more international content like Korean drama Squid Game could be the answer to its prayers, tapping into more unused demographics and countries around the globe.