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ROKU

Roku NasdaqGS:ROKU Stock Report

Last Price

US$56.40

Market Cap

US$7.8b

7D

-5.8%

1Y

-82.1%

Updated

01 Oct, 2022

Data

Company Financials +
ROKU fundamental analysis
Snowflake Score
Valuation3/6
Future Growth1/6
Past Performance0/6
Financial Health5/6
Dividends0/6

ROKU Stock Overview

Roku, Inc., together with its subsidiaries, operates a TV streaming platform.

Roku, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Roku
Historical stock prices
Current Share PriceUS$56.40
52 Week HighUS$350.60
52 Week LowUS$55.17
Beta1.68
1 Month Change-17.42%
3 Month Change-32.79%
1 Year Change-82.06%
3 Year Change-47.18%
5 Year Change143.10%
Change since IPO140.00%

Recent News & Updates

Sep 29

Roku, Nielsen team on cross-media measurement expansion

Roku (NASDAQ:ROKU) is teaming up with Nielsen (NYSE:NLSN) on measurement across "four screens" - what Nielsen says is a first and a key step toward its approach to cross-media ratings. Roku is expanding measurement across traditional television, connected television, desktop and mobile. The new move builds on an existing relationship that began with Nielsen's Digital Ad Ratings measurement in 2016. Roku's OneView advertising platform is directly integrated with Nielsen's measurement solution. Measuring across those different views allows marketers to deduplicate campaign reach and frequency across the four screens. More important, the move will underpin audience deduplication in Nielsen ONE - the company's ambitious cross-media measurement goal, launching in December. "We believe that all TV ads will be accountable and measurable," said Roku's Asaf Davidov. "Our direct consumer relationship, our scale, and our tech all make us uniquely positioned to work with Nielsen to make measurement simpler and more accurate as marketers shift spend to TV streaming." On Tuesday, Roku announced its high-end Ultra player was coming to Canada.

Sep 22

Roku: Bearish Now? That's Too Easy

Summary Roku is one of a bunch of stocks that the market has been selling in an undiscerning fashion for nearly 18 months. Given that the average bear market lasts around 18 months to 2 years, I think there's no question that we are over the worst already. Roku isn't without blemishes. The business must work to get advertisers to return to its platform. I make the case that at some point in 2023, Roku's business model could start to get some traction. I estimate that Roku at 17x next year's EBITDA is starting to become interesting. Investment Thesis Roku (ROKU) has been on a massive and consistent slide since its highs. In fact, anyone that's come to the stock at any point in the past 3 years is now holding a loss. Today, nobody considering buying Roku can likely think of anything positive to say about the company. Yet, as I look through and consider the company rationally, and objectively, with no skin in the game here, I believe that the stock offers investors a fair margin of safety. I estimate that Roku is priced at 17x next year's run-rate EBITDA. That's a valuation that's starting to become interesting. The Market Has Been Undiscerning, Leading To Frustration The bear market that we are in today didn't start in 2022. A great many companies peaked in February 2021 and a proportion would go on to give their last breath in the summer of 2021. And since that point, the market has been sell-off countless names. And even though today a lot of investors are waking up and readying headlines postulating the depth of the recession that we are about to enter, here's a fact. Small and medium cap stocks have already been in this bear market for at least 12 to 15 months, and some have been selling off for 18 months already! Think of names such as DraftKings (DKNG), Chewy (CHWY), Palantir (PLTR), and Block (SQ), to name a few. And sure, we can all agree today that they should never have become as expensive as they did, in an era of easy money. But the fact stands that even though these businesses have very little overlap, the market has been punishing these names for nearly 18 months. What's Next For Roku? I believe that it's safe to assume that we are much closer to the bottom now than we are to the top. Indeed, even if the market was to come down another 10% or so, given that we are already down 24% from the peak, statistically speaking, the risk-reward today is quite good. ROKU revenue growth rates Now, let's be honest, Roku's guidance for Q3 is nothing short of horrible. There's very little positive we can say about Roku's mid-single revenue growth rates. And then, the problems get even worse as we get into Q4. The reasons for this are twofold. In the first instance, the comparables with the prior year are still tough. Secondly, and more pertinent, as we progress into Q4, the economy is tinkering on the verge of substantial recession. These two considerations when combined lead me to believe that analysts' expectations for Roku's Q4 are still too high. Analyst's revenue growth consensus That being said, I'm inclined to believe that despite the consensus revenue CAGR for Q4 being too high, I'm in the camp that believes when the economy starts to stabilize, the first sectors that will be forced to come back will be advertising. And here I think Roku will succeed in gaining substantial traction and will positively impress investors. How Will 2023 Shape Up? The biggest advantage that Roku will have, I believe, will stem from the fact that during a cost of living crisis, many households will be forced to reconsider their streaming packages, such as Netflix (NFLX), Disney+ (DIS), Apple TV (AAPL), and others. And I recognize that amongst affluent SA readers, the thought of canceling Netflix or other streaming platforms sounds prosperous! But the reality is that outside of our tight demographic, in the real world, households are fighting. They are fighting high inflation. They are fighting higher mortgage payments. They are fighting high food prices. They are fighting high energy prices. In essence, the amount of disposable household income is going to shrink in the coming months. And when that happens, everything that is non-discretionary will be re-evaluated. Meanwhile, Roku already has 65 million active accounts that are on Roku's platform as of Q2 2022. And this figure is growing at double digits, even now. And when advertisers look to increase their spending when the economy stabilizes, where will they turn to? ROKU's Q2 2022 Will they go to social media platforms, where costs have become prohibitive? Or will they migrate to CTV, where they can get very higher ROIs? What's more, Roku is able to know exactly what viewers are interested in and engaging with in real-time. This offers advertisers on Roku's platform a direct channel to users with back-end measurable performance analytics. Nevertheless, for Roku to be a real success in 2023, it will have to figure out how to bring more users onto its platform, while ensuring that its hardware isn't being sold at a loss. Again, Roku isn't without issues. ROKU Stock Valuation - Difficult To Value Despite my bullishness, I find it very difficult to come up with any sort of intrinsic value for a business that is likely to remain EBITDA negative for at least 2 more quarters. And then, I believe it will probably only at approximately 10% to 15% y/y in H2. On the other hand, as I've alluded to throughout, Roku's advertising customers have already been fleeing the platform for a while. And I believe that when they'll return, at some point in 2023, Roku's business model will benefit from its robust operating leverage.

Sep 22
Quick Takes: Palo Alto, Alphabet, Meta & More

Quick Takes: Palo Alto, Alphabet, Meta & More

Vladimr Putin’s latest mobilization caused the oil price to spike yesterday morning. Somewhat predictably, energy stocks opened higher, - but then very quickly reversed course, along with the price of crude, when it emerged that US inventories increased by 1.1 million barrels from a week earlier. Exxon (NYSE: XOM), Chevron (NYSE: CVX) and Occidental Petroleum (NYSE: OXY) all closed lower on the day.

Sep 15

Roku jumps as new change-in-control language sparks takeover speculation

Roku Inc. (NASDAQ:ROKU) soared 6.6% after the company amended its severance benefit plan for in the event of a change in control, according to an 8-K filing late Wednesday. Shares of the TV streamer gained as some investors believe that the new change-in-control language may mean that a takeover offer may be coming. Dealreporter highlighted the new language in an item, though it did point out that any possible takeover offer would be difficult given Roku's (ROKU) many defenses. ROKU founder and CEO Anthony Wood has control 59% of the voting power held through Class B shares. The speculation comes after an early June report that after Roku (ROKU) had "abruptly" closed a trading window for employees and talk of acquisition by Netflix (NFLX) were swirling inside the streaming company.

Shareholder Returns

ROKUUS EntertainmentUS Market
7D-5.8%-1.4%-2.5%
1Y-82.1%-52.0%-23.2%

Return vs Industry: ROKU underperformed the US Entertainment industry which returned -50.8% over the past year.

Return vs Market: ROKU underperformed the US Market which returned -21.5% over the past year.

Price Volatility

Is ROKU's price volatile compared to industry and market?
ROKU volatility
ROKU Average Weekly Movement12.0%
Entertainment Industry Average Movement9.1%
Market Average Movement6.9%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.8%

Stable Share Price: ROKU is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 12% a week.

Volatility Over Time: ROKU's weekly volatility (12%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

FoundedEmployeesCEOWebsite
20023,000Anthony Woodhttps://www.roku.com

Roku, Inc., together with its subsidiaries, operates a TV streaming platform. The company operates in two segments, Platform and Player. Its platform allows users to discover and access various movies and TV episodes, as well as live TV, news sports, shows, and others.

Roku, Inc. Fundamentals Summary

How do Roku's earnings and revenue compare to its market cap?
ROKU fundamental statistics
Market CapUS$7.78b
Earnings (TTM)-US$46.00m
Revenue (TTM)US$3.04b

2.6x

P/S Ratio

-169.1x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
ROKU income statement (TTM)
RevenueUS$3.04b
Cost of RevenueUS$1.58b
Gross ProfitUS$1.46b
Other ExpensesUS$1.51b
Earnings-US$46.00m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-0.33
Gross Margin48.09%
Net Profit Margin-1.51%
Debt/Equity Ratio3.0%

How did ROKU perform over the long term?

See historical performance and comparison