Netflix stock rose 2.5 % in premarket trading Monday after Citi upgraded it to a 'buy' rating with a $450 price target, up 17 % from its Friday close of $384.36.

According to sources, analyst Jason B Bazine cited the stock's attractive value as a reason for his optimism. Netflix's stock has lost over a quarter of its value since the company's disappointing January 20 guidance to dealers and other stakeholders.

Netflix Font is → Bebas Neue

By March, the business expects to have added 2.5 million members, down from the 4 million it added in the first quarter of 2021. It has approximately 222 million users at the end of December.

After nearly two years of blistering growth powered by the pandemic, Netflix is facing mounting challenges. The likes of Disney+ and Discovery are increasing competition, while content expenses are rising as well.

Netflix's cash flow is strong, according to Bazine, and "the current equity value presents an attractive entry point." In the fourth quarter, free cash flow more than doubled from the previous year, reaching $569 million.

In other news, Netflix CEO Reed Hastings spent about $20 million last week on 51,440 shares of the firm. Following the transaction, Hastings currently owns approximately 5.16 million shares through a Trust. Bill Ackman of Pershing Square Capital, a hedge fund manager, has purchased nearly 3.1 million Netflix shares.