It's been a wild ride for Netflix (NFLX 2.47%) in 2022. Shares of the streaming giant plunged 71% between January and June. And while the second half of the year has been more kind, Netflix will likely finish 2022 down roughly 50%.

But investing is all about where a stock is headed -- not where it's been. So, how does Netflix look heading into 2023? Is it a buy? Let's take a closer look.

Hand pointing remote at TV with streaming menu.

Image source: Getty Images.

Netflix's growth has stalled

The reason for Netflix's catastrophic 2022 is simple: Its growth dried up. In April, Netflix reported its first loss of subscribers in more than a decade. What's more, and perhaps worse, the company's revenues are flattening.

In its most recent quarter (the three months ending on Sept. 29, 2022), Netflix reported quarterly revenue growth that was only 5.9% higher than a year earlier. For a company that has averaged 24% growth over the last five years, less than 6% growth is a drastic slide.

Chart showing Netflix's quarterly YoY revenue growth falling since 2018.

NFLX Revenue (Quarterly YoY Growth) data by YCharts

The culprit? An extremely crowded streaming market. Gone are the days when Netflix dominated the streaming business. Now, the company competes with tech giants like AppleAmazon, and Alphabet and legacy media names such as DisneyComcast, and Paramount.

Moreover, the company's ad-supported tier, which was supposed to ride to the rescue, is reportedly struggling to attract viewers. Digiday reported that some advertisers received refunds after viewership targets fell short of expectations.

Without double-digit growth, Netflix has lost its mojo

The question for investors is this: Is Netflix worth owning if its days of double-digit growth are behind it?

The fact is that Netflix has always been a growth stock. The company has never succeeded because of its valuation -- it's succeeded in spite of it. For years, Netflix traded with a price-to-earnings (P/E) ratio well above 100 -- and shares continued to rip higher nevertheless.

But that was all possible because the company was tapping a growing market in innovative ways. Yet now the company has shifted its business model to a more traditional television approach -- producing lots of content, selling ads, and hoping for big hits that will keep both subscribers and advertisers happy.

It's a tricky business, and that's part of the reason why entertainment companies don't trade at astronomical P/E ratios. Interestingly enough, if you compare Netflix to Comcast, it's the legacy media company that now trades at a slight premium to the former growth darling.

Chart showing Netflix's PE ratio falling since 2018, while Comcast's has risen slightly.

NFLX PE Ratio data by YCharts

Is Netflix a buy?

For me, Netflix remains a stock I'm not interested in owning. Its relatively small library of content is now facing direct competition from legacy companies that own some of the most famous characters in the world. In addition, Netflix offers nothing in the way of sports -- which is some of the most sought-after programming for viewers and advertisers alike. As the streaming wars rage on, I'll continue to wait on the sidelines.