2024-03-22 09:30:00 ET
Summary
- Roku delivered on its FY2023 targets while offering an optimistic FQ1'24 guidance, implying that its turnaround may finally be here.
- Despite the recent profit-taking and WMT-VZIO headwinds, the stock remains well supported at the $60s, offering interested investors with an attractive entry point.
- ROKU stands to benefit from the increased introduction of ad-supported streaming tiers from multiple media giants, due to their improving ad monetization and sustained cord-cutting trend.
- We expect to see certain concessions from WMT on the VZIO deal, with ROKU's operating platform likely to be integrated as it is on the former's onn TVs.
- Assuming that ROKU is able to sustain the high growth cadence while generating FCF profitability and maintaining its market leadership, its long-term prospects appear to be bright ahead.
We previously covered Roku ( ROKU ) stock in August 2023, discussing why we believed that its FY2024 positive adj EBITDA target appeared to be overly ambitious, thanks to its underwhelming performance and declining ARPUs in FQ2'23....
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For further details see:
Roku: Walmart-VIZIO Sell-Off Offers Great Opportunities - Robust Profitability Ahead