This Is Why Netflix Shares Are Tanking

Netflix investors may feel like they are on an emotional rollercoaster similar to watching the streaming cable service’s series Jessica Jones.

The stock is up 65% in the past year. But it’s off more than a quarter since early December. Hold on. It’s up 17% since its February lows, and today, shares are down almost 6% to just under $96, making it, as of mid-day, the worst-performing stock in the S&P 500.

Shares of Netflix are volatile for good reason: The company is hard to predict. It doesn’t have a true publicly traded competitor (so comparisons are difficult), and it’s in a business that is rapidly changing. Analysts estimate the stock is currently worth anywhere from $85 a share to $155. One analyst even believes it could reach $200 a share by 2019. Small wonder investors are along for the ride.

Last week Netflix investors got some good news, or so it seemed. Industry specialist Michael Nathanson of MoffettNathanson said that Netflix accounted for about half the overall drop in TV viewing in the U.S. in 2015. In the report, Nathanson predicted Netflix’s total streaming hours as a percentage of TV viewing will continue to rise to about 14% by 2020, according to a story in Variety.

The trouble is that while Netflix cut into American TV viewing, it wasn’t by a whole lot. Overall, viewing dropped 3%, the report says. “Currently, Netflix is a source of industry pain, but not necessarily a cause of industry death,” he wrote in the note, according to Variety.

Netflix has already flooded the U.S. market. According to a survey conducted by RBC Capital analyst Mark Mahaney, 53% of respondents now use Netflix, more than YouTube (46%) and Amazon (27%). “Slowing subscriber growth is possible if the U.S. market nears saturation,” said FBR analyst Barton Crockett in a note. “Another risk is competition from other streaming VOD providers, including Amazon Prime and Hulu, which also offer services with subscription-based models.”

Bulls point to Netflix’s growth potential outside of the U.S., but this opportunity is reflected in the stock’s valuation. For example, Crockett says the U.S. streaming service is worth about $25 a share, or a little more than a quarter of the company’s current stock prices. The remaining value, or roughly $72 a share, comes from the international business (another small bit comes from DVD subscriptions and Netflix’s original business).

But that growth abroad is fraught with potential pitfalls. In Japan, for example, only 1% of the respondents of Mahaney’s survey use the company’s services, compared to 39% for YouTube, 18% for Nico Nico, 13% for GYAO!. In fact, even Google Play, the search engine’s also-run streaming service, ranked higher than Netflix in Japan.

That might sound like an opportunity, but a whopping 57% of the respondents said they were “not at all likely” to pay for streaming content, almost three times as many as in the U.S. At the same time, just 6% said they were not likely to cancel, compared to nearly three-quarters of Netflix’s U.S. users.

All of this might be OK for investors if these risks were price into the company’s shares. But it doesn’t appear to be. Even after today’s drop the stock trades at a nearly 370 times next year’s earnings. Earnings are expected to quadruple next year, so that valuation may make sense. But if Netflix’s bottom line doesn’t soar, investors may tune the company out.

This article originally appeared on Fortune.com