Citi Says Customers Still Satisfied with Netflix (NFLX), Sees Profitability in FY12
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Price: $62.47 -0.32%
Rating Summary:
24 Buy, 13 Hold, 2 Sell
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Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
24 Buy, 13 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Earlier in the session, Citi (NYSE: C) cut its price target on Netflix (Nasdaq: NFLX) from $94 to a new target of $80. Here is some more color on that.
The changes come as Citi recently conducted a survey and found some surprising results: most customers are relatively happy with Netflix service. According to AllThingsD, the survey found that 57 percent of respondents said they're "extremely satisfied" or "very satisfied" with Netflix service.
There was an overall shift. In May, the "extremely satisfied" category garnered 50 percent of the votes, and that dropped to just 18 percent of responses in the current evaluation. Overall, the top two categories combined for 83 percent of responses in May, with many respondents moving to the "moderately satisfied" category," moving the number from 9 percent prior, to 34 percent with the current survey.
Citi points out that the data might be skewed a bit, since those really angry with the price hike, lost deals, and business separation attempt, have already left.
But Netflix keeps growing, even at a slower pace. Citi also asked what services consumers have used for streaming media in the past. In May, 27 percent said they used Netflix, which dropped to 20 percent in the recent survey. Second was Hulu, gaining 4 points to 19 percent, and "other" was third with a 9 point gain to 15 percent.
Apple's (Nasdaq: AAPL) iTunes was sixth, holding firm at 8 percent.
Overall, Citi expects Netflix to lose 800,000 DVD-only subs, to a total of 9.9 million through 2012, while streaming subs will increase 9.9 million to a total of 30.9 million. The expansion into LatAm and the U.K. will also tack on a few more subs.
Citi sees Netflix being profitable again by the end of calendar 2012. It's new price target of $80 suggests about 12.7 percent of upside, but Netflix still has a long way to go back to the $300+ level it attained over the summer.
Netflix is up slightly Thursday morning.
The changes come as Citi recently conducted a survey and found some surprising results: most customers are relatively happy with Netflix service. According to AllThingsD, the survey found that 57 percent of respondents said they're "extremely satisfied" or "very satisfied" with Netflix service.
There was an overall shift. In May, the "extremely satisfied" category garnered 50 percent of the votes, and that dropped to just 18 percent of responses in the current evaluation. Overall, the top two categories combined for 83 percent of responses in May, with many respondents moving to the "moderately satisfied" category," moving the number from 9 percent prior, to 34 percent with the current survey.
Citi points out that the data might be skewed a bit, since those really angry with the price hike, lost deals, and business separation attempt, have already left.
But Netflix keeps growing, even at a slower pace. Citi also asked what services consumers have used for streaming media in the past. In May, 27 percent said they used Netflix, which dropped to 20 percent in the recent survey. Second was Hulu, gaining 4 points to 19 percent, and "other" was third with a 9 point gain to 15 percent.
Apple's (Nasdaq: AAPL) iTunes was sixth, holding firm at 8 percent.
Overall, Citi expects Netflix to lose 800,000 DVD-only subs, to a total of 9.9 million through 2012, while streaming subs will increase 9.9 million to a total of 30.9 million. The expansion into LatAm and the U.K. will also tack on a few more subs.
Citi sees Netflix being profitable again by the end of calendar 2012. It's new price target of $80 suggests about 12.7 percent of upside, but Netflix still has a long way to go back to the $300+ level it attained over the summer.
Netflix is up slightly Thursday morning.
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