2024-04-15 13:35:31 ET
Summary
- Roku's financials and business metrics do not fully reflect the business, causing a disconnect that might confuse investors.
- Most of Roku's advertising seems to be brand vs. programmatic, impacting the growth of its platform business.
- Walmart's acquisition of Vizio is unlikely to pass regulatory scrutiny, given harm to competitors is easily demonstrable.
Last time I covered Roku Inc. ( ROKU ) was in January 2023. Back then, I said that the company's move to manufacture its own-branded TVs would improve margins and revenues , mainly because Roku does not receive license revenue for offering its OS to other TV OEMs.
The stock has gone on to gain 33.6% since then, matching the S&P 500 during the period. However, it is down almost a third YTD and more than 35% since I initiated coverage in mid-2022. In that initial article, I argued that the large size of the TV market and Roku's dominant position in it could help the company become a giant....
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Roku Fears Overblown But Monetization Challenges Are Real