2024-05-02 10:26:34 ET
Summary
- The main investment thesis lies in Roku's ability to achieve profitability quickly, and to re-accelerate its advertising revenue growth.
- Share Price fell by 8%, suggesting that Roku has fallen short of market's expectations.
- Its premium valuation suggests that the market has priced in greater risk, and Roku has to demonstrate it can deliver strong execution.
- I rate Roku as a hold for now.
Investment Thesis
In its early days, Roku (ROKU) was riding on the structural tailwind of the shift from traditional TV to online streaming, propelling it to becoming the market leading online streaming platform that boasts a large user base of over 120 million users in the U.S. today. Roku is an indispensable partner in helping streaming giants like Netflix, Prime and Disney+ to drive subscriptions, it is also a valuable asset in the advertising industry for ad-tech platforms like The Trade Desk (TTD) and advertisers that are increasingly shifting their ad budgets from traditional TVs to digital platforms including Roku....
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Roku: Increased Pessimism Priced In