Published - Apr 6, 2022 @ 12:40 PM (EET)

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While global markets are coping with various challenges and geopolitical uncertainties, Netflix (NASDAQ:NFLX) has had its fair share of ups and downs since the onset of the coronavirus pandemic.

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Driven by lockdowns that forced consumers to spend more time at home, Netflix soon thrived with its most expensive plan, which cost less than $20 per month. During the two-year pandemic stint, Netflix added 50 million new subscribers while revenues increased 50%.

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Unsurprisingly, with lockdowns now seemingly over and consumers spending more time outdoors, subscriber growth has effectively slowed, which led to underwhelming quarterly consensus estimates and the company's guidance.

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After missed expectations in the earnings report in January, Netflix took a big hit when the stock witnessed an overnight drop of nearly 30% from roughly $500 to $360.  

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In addition, with little to no competition previously, several media companies realized the value of offering a streaming service to their customers during the pandemic and launched one of their own at lower prices than Netflix.

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Netflix has been net-negative for years as it initially invested heavily in buying and creating new content.  

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Although the stock is down 37% year-to-date, Netflix has reached a large enough scale to sustain itself financially and be potentially free cash flow positive from 2022 onwards.  

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It is important to note that Netflix's business is fundamentally built on taking advantage of economies of scale.  

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Thus, subscriber growth, acquisition costs, and geographical sales will be at the top of players' minds, looking for a sizable bump in the 221.8 million customers by the end of 2021.

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Despite some uncertainties, JP Morgan analyst Doug Anmuth believes that given Netflix's top-quality content, the company is bound to benefit from the "ongoing disruption of linear TV" and achieve further global sub-penetration.  

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Anmuth predicts Netflix to reach 300 million global subscribers by the end of 2025, while other Wall Street analysts are cautiously optimistic about the stock, with a Moderate Buy consensus rating.

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With everything considered, now might be the time to start looking at Netflix's stock.

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