Technology stocks have led the decline on the markets this year, wiping off significant investor wealth. In the last decade, high-growth tech stocks generated exponential returns for investors due to a low-interest-rate environment, rising global GDP rates, and the ongoing pandemic. 

Now, the macro-economic environment is exceptionally sluggish due to rising interest rates, inflation, supply chain disruptions, and the threat of an upcoming recession, bringing down valuations of expensive tech stocks.

While the S&P 500 index is down 19% in 2022, several tech stocks are trading at a massive discount compared to last year. So let's take a look at three of the worst-performing tech stocks on the S&P 500 right now. 

Netflix

Shares of the streaming giant Netflix (NASDAQ: NFLX) are down 70% year-to-date, valuing the company at a market cap of $80 billion. The last time NFLX stock traded at $180 was back in September 2017. 

As Netflix exited the Russian markets it lost subscribers for the first time ever in Q1, making investors extremely nervous. 

Netflix also competes with tech heavyweights such as Disney, Apple, and Amazon in the streaming segment, all of whom have a massive war chest and diversified businesses. These companies can afford to burn cash to acquire customers and expand their user base. 

While Netflix remains the leader in online streaming, it is now looking to diversify its revenue streams and may well consider an ad-based model to grow market share in emerging markets such as Asia and Latin America. 

Netflix expected to add 2.5 million customers but lost 200,000 paying subscribers in Q1. The company stated it might lose another two million subscribers in Q2 and has missed subscriber estimates in three of the last five quarters. 

Due to the steep decline in NFLX stock, it's now valued at less than three times forward sales and a price to earnings multiple of 16.5, which is attractive. Wall Street remains bullish on Netflix and expects the stock to gain 60% in the next year. 

Etsy

An e-commerce company, Etsy (NASDAQ: ETSY) stock is down 63.5% in 2022. Etsy gained massive traction amid COVID-19 as its sales more than doubled to $1.72 billion in 2020. The company expanded its top line by another 30% in 2021 but might grow sales by "just" 8% this year. 

However, investors should note that Etsy operates in a niche segment and is part of an expanding addressable market. It has a massive portfolio of handmade products, which should attract new buyers and sellers over time. Further, the e-commerce market is forecast to grow annually by 14.7% in the next five years. Etsy also accounts for a fraction of its total addressable market, which is forecast at $2 trillion. 

Etsy ended Q1 with 95.1 million active buyers and 7.7 million active sellers. Its gross merchandise volume, which is the total transaction value processed on Etsy's platform, rose 3.5% to $3.3 billion. Unlike other growth stocks that are part of the tech sector, Etsy is consistently profitable. It reported an operating margin of 72% in 2021, while its cash flow stood at $623 million after excluding acquisitions. 

ETSY stock is valued at 4x forward sales and a price to earnings multiple of 33x, which is reasonable. It's trading at a discount of 60% to consensus price target estimates. 

Align Technology

The final stock on the list is Align Technology (NASDAQ: ALGN), down 62.4% in 2022. A medical device company, Align Technology, is involved in designing, manufacturing, and marketing dental aligners and other products. Due to the robust demand for its products, Align Technology managed to increase sales from $1.96 billion in 2018 to $3.95 billion in 2021. 

But its sales growth is expected to decelerate to 9.2% to $4.32 billion, while adjusted earnings might narrow by 11% to $10 per share in 2022. 

Align Technology's dental devices cost upwards of $2,000, which is quite expensive for the average buyer, especially given rising inflation numbers and an uncertain economic environment, which might act as near-term tailwinds for the company.

However, Align Technology is a market leader in a space estimated to grow by 29.5% annually through 2030. 

ALGN stock is valued at 4.5x forward sales and a price-to-earnings multiple of 24.5x. It's trading at a discount of 84% compared to consensus price target estimates.