It's no secret that 2022 has been a rough year for Netflix (NFLX 0.58%).

The video-streaming veteran saw slowing subscriber growth that escalated into losing a million customers in the second quarter. Netflix's management had to come up with some new ideas. Now, the company is cracking down on password-sharing subscribers and providing an ad-supported service for the most price-sensitive demographic.

Due to this heart-pounding drama, Netflix shares crashed hard in the first half of the year. The stock has staged an impressive comeback in recent months, trading 81% above the lows of early May, but we're not talking about a full recovery. Whether you look at year-to-date moves, 52-week price changes, or the separation from 52-week highs, Netflix ranks among the worst-performing stocks on the market. In all three cases, Netflix ranks in the bottom 20 performers among the 503 components of the S&P 500 market index.

As we march toward the new year, curious investors want to know one thing about Netflix: Is the streaming specialist's stock set up to crush the market and make a lot of money in 2023, or should we expect the bearish trend to dominate next year's market action?

Why you might want to leave Netflix shares alone

Netflix bears can present a few reasonable arguments.

  • That 81% rebound from the bottom of the trough is too large to ignore. Whatever good news that might lie ahead must already be priced into the stock.
  • The stalled subscriber growth is a massive shift from the nonstop rally of recent years. Losing that momentum at the drop of a hat shows that there must be something wrong with the business.
  • The reasons for the slower growth are unclear, but the potential culprits include the price increases of 2021, the plethora of media-streaming rivals, and market saturation in an era of tight consumer budgets. Facing just one of these brutal headwinds would be tricky enough, but Netflix has to manage these challenges all at once.

If your Netflix analysis points to one or more of these bullet points, you won't want to own the stock right now. At the very least, you're not drooling over the prospect of buying Netflix shares near the end of 2022. From this point of view, Netflix has a lot to prove and you'd prefer to invest your hard-earned cash elsewhere until further notice.

Why you should buy Netflix hand over fist

The critical points above don't look very scary from the other side of the fence.

  • If Netflix stock was worth more than $680 per share a year ago, no law of physics, mathematics, or mass psychology would stop share prices from reaching that level again. As long as the business runs well, Netflix stock could double over the next 12 months.
  • Yes, the lack of massive subscriber growth is new to Netflix. However, the company is already adjusting to this state of affairs, and management has refocused the growth engines to target long-term revenue growth and robust profits instead. This strategy shift feels like Netflix is evolving its business model, not slapping a panic button.
  • Netflix has faced groups of multiple business challenges many times before, and always found effective remedies in the end. This situation is no different. If the last round of price increases was too much for an increasingly price-sensitive consumer market, the company could wait a few years before going any further. Speaking of price increases, chief competitors Amazon Prime (AMZN -0.94%), Disney+ (DIS -0.14%), and Apple TV+ (AAPL 0.66%) are all raising their subscription fees these days. That groundswell of higher prices seems to give Netflix more breathing room.

In this light, Netflix looks ready to take on 2023 with a tweaked business plan. We will soon find out how effective the anti-sharing measures and ad-supported subscription plans are in the real world. And the newfound spotlight on profitable growth should result in more robust cash flows and bottom-line earnings in 2023 and beyond. The Netflix bears of yesteryear used to ask for exactly that type of strategy adjustment. As a result, the arrival of stronger profit streams can drive valuation ratios and share prices much higher over time.

Final verdict: Yes, Netflix is a no-brainer buy right now

Netflix stands at a crossroads right now, stepping away from the ideas that took the company this far and exploring new growth-promoting plans for the next stage. I haven't even mentioned potential game-changers like the nascent video game service, the vast opportunity in online services taking eyeballs away from traditional media outlets, or the improving digital payment systems in developing nations.

Just one of these big ideas would be promising enough, but Netflix stands to benefit from all of them. Ergo, Netflix is set up for tremendous long-term gains from the low point in 2022 -- and the stock is still on fire sale. So right now, wise investors should buy Netflix stock hand over fist.