Netflix shares and customer satisfaction rise
October 4, 2012
Netflix shares rose this week after an analyst said customer satisfaction is on the rise recovering from the price hike last year. Citi Research said that more customers are satisfied with the movie streaming service. It cited better sentiment in Citi’s quarterly survey of 3,800 US Internet users, including about half that either had a Netflix subscription or are currently subscribers.
At the end of September, about 48 per cent of current subscribers said they were “extremely satisfied” or “very satisfied” with the service, up from 44 per cent three months earlier and 45 per cent six months ago.
While the level is still below the 57 per cent of people who gave the service exceptional reviews in December 2011, Citi said the bounce in sentiment off recent lows “gives us reason to believe that the largest part of the impact may be behind us.”
At the end of June, Netflix had 27.6 million streaming video customers and 9.2 million subscribers of discs, although many of the disc subscribers are also streaming customers.
Citi says that he expects Netflix to earn $5.50 per share on its US operations, which means that investors would be paying about 10 times US earnings to buy the stock, while benefiting if the company’s overseas expansion goes well.