Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Roku and The Trade Desk. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

A merger between streaming technology and connected TV (CTV) leader Roku Inc. NASDAQ: ROKU and adtech leader The Trade Desk Inc. NASDAQ: TTD was suggested by a Guggenheim analyst, causing both stocks to rise. Roku shares rose over 20% following the suggestion on Dec. 2, 2024, while The Trade Desk shares rose 10%. The market reaction was notable since a merger was just a “what-if” scenario not rooted in any reality or interaction between the companies. The stocks reacted as if there were active talks. It has ...

Ark Invest's focus on owning innovative and disruptive businesses has made its founder and CEO Cathie Wood a closely followed investment professional. Someone looking to put some money into the stock market might follow her trading moves to find potential investment ideas.In the Ark Innovation ETF, the company's flagship fund with $5.4 billion in assets (as of Dec. 9), Roku (ROKU 1.33%) is one of the top positions. It represents a sizable 9.3% of the holdings in the exchange-traded fund (ETF).The streaming ...

Core Viewpoint - Roku's stock has significantly declined over the past five years, with a current return of -40%, primarily due to increased competition in the streaming market and a shift in consumer behavior post-pandemic [1] Group 1: Business Performance - Roku has diversified its business by launching new products, including smart home devices and its own TVs, but this transition has not been successful so far [2][3] - The company has reported a net loss in each of the past four quarters, raising concerns about its earnings trajectory as it shifts focus to lower-margin hardware sales [4][6] Group 2: Upcoming Earnings and Market Conditions - The upcoming earnings report in February 2025 is critical for Roku, particularly its performance during the Black Friday shopping period, which could indicate the health of its business [5][6] - Investors should monitor whether Roku can achieve significant revenue growth while improving gross profit margins, as failure to do so may confirm negative trends in the business [6] Group 3: Competitive Landscape - Walmart's acquisition of Vizio poses a potential threat to Roku, as Walmart aims to expand its advertising business and leverage Vizio's SmartCast operating system, which has 19 million active accounts [7][9] - Despite Roku's larger audience of 85.5 million streaming households, increased competition from Walmart could hinder Roku's growth in both platform and device revenue [8][9] Group 4: Investment Outlook - Roku's stock has fallen approximately 9% year-to-date and is currently trading at three times its trailing revenue, which is not considered expensive; however, the lack of profitability and emerging competition from Walmart raises concerns about future performance [10] - Investors may be advised to remain cautious and observe Roku's performance in the coming quarters, as well as Walmart's strategic moves regarding Vizio, to better assess the competitive landscape [11]

Roku stock has been on fire, sparked by rumors on Wall Street.Being an investor in Roku (ROKU 11.46%) could best be described by the opening words of the Charles Dickens novel A Tale of Two Cities: "It was the best of times, it was the worst of times." Since the company's IPO in late 2017, the stock soared as much as 1,940% in less than four years. However, the combination of a post-pandemic streaming hangover and economic downturn ravaged advertising budgets and sent Roku plunging. The stock has never real ...

Shares of connected TV platform company Roku (ROKU 10.56%) jumped Wednesday morning after Needham analyst Laura Martin said she believes that Roku will be acquired at a hefty premium in 2025. As of 11:30 a.m. ET, Roku stock was up by 10.5%.Competition in connected TV is heating upFor context, Amazon began airing limited ads on its Prime Video service in 2024, and it plans to increase the amount of commercials it shows in 2025, making use of the vast trove of retail data it has from its e-commerce platform. ...

Roku Inc (NASDAQ:ROKU) stock is 6% higher at the open, after Needham said it sees the streaming company being bought for a "large premium" within the next 12 months. The analyst in question maintained its "buy" rating and $100 price target on ROKU.Roku stock has now broken above $80, which has kept a lid on shares since mid-September. The equity is also on track to fully recover the 5.9% it's lost over the last three months, and has increased its year-to-date lead to more than 10%.Coming into today, the maj ...

Core Viewpoint - Roku has experienced a significant decline in stock value, down 71% over the past three years, with a recent revenue growth of 14% compared to 81% in Q2 2021, raising questions about the potential for recovery in the stock price [1][2] Company Overview - Roku's platform segment is the primary revenue driver, accounting for 85% of total revenue in Q3, while device revenue has remained flat since 2019 [3][4] - The company has expanded its offerings to include Roku Streaming Stick and Roku-branded TVs, facing competition from Amazon's Fire Stick and Fire TV [4] Revenue and User Growth - Revenue from devices increased by 39% in Q2 and 23% in Q3, despite the overall flat trend since 2019 [4] - The number of streaming households has grown by 13% year-over-year, indicating an increase in users utilizing the Roku OS, which has a gross profit margin of 54% [5][6] Market Position - Roku OS-powered TVs dominate the market, with Q3 sales exceeding those of the second and third-largest operating systems combined, contributing to user growth [7][8] - The company anticipates a 25% growth in device sales in Q4, despite the devices segment not being a primary concern as long as Roku OS continues to attract users [8] Profitability Outlook - The platform segment's gross margin increased by over 600 basis points in Q3, although the company reported a loss of $36 million, which is significantly lower than the $350 million loss in Q3 2023 [9][10] - The company expects losses to widen to $65 million in Q4 due to holiday promotions and strong device sales growth, but this is not seen as a major concern as long as user engagement with Roku OS increases [10] Advertising and Revenue Challenges - A forecasted decrease of around 200 basis points in platform gross margins for Q4 is attributed to reduced advertising demand from streaming services focusing on profitability [11] - Roku may find alternative high-margin advertisers, with potential partnerships, such as with The Trade Desk, enhancing its advertising ecosystem [12]

Roku (ROKU) shares tumbled 11.4% following its third-quarter 2024 earnings release, despite posting better-than-expected results. The streaming platform reported a loss of 6 cents per share, narrower than the Zacks Consensus Estimate of a loss of 35 cents, while revenues grew 16.47% year over year to $1.062 billion, surpassing estimates. This marked Roku's first quarter exceeding $1 billion in total net revenues, with Platform revenues rising 15% year over year.Share Price MovementImage Source: Zacks Invest ...

Core Viewpoint - Investors are optimistic about Roku's potential for a significant recovery in stock value, similar to Netflix's trajectory, despite Roku's stock having lost 85% of its value since its peak in 2021 [2][10]. Group 1: Company Overview - Roku is recognized for its streaming devices and TVs, but it sells hardware at a loss to attract users to its software platform, which generates revenue through ads and fees from third-party partners [3][4]. - The company aims to be the primary gateway for streaming content, profiting from all streaming activities on its devices [4]. Group 2: Competitive Landscape - Roku faces competition from both TV manufacturers and other streaming services, including its own in-house service, The Roku Channel [5]. - Despite competition, Roku's user base has grown to 85.5 million households, providing leverage in negotiations with streaming services [6][9]. Group 3: Financial Position - Roku is not yet GAAP profitable but generates free cash flow and has $2.1 billion in cash with no debt, while its stock trades at a low price-to-sales (P/S) ratio of 2.5 [7][10]. - Analysts project Roku's revenue to exceed $4 billion in 2024, reflecting a 14% increase, and $4.6 billion in 2025, indicating 15% year-over-year growth [10]. Group 4: Market Sentiment - Wall Street has shown skepticism towards Roku's business model, particularly after management decided to stop reporting certain metrics, leading to stock sell-offs [8]. - The announcement of a competing smart TV operating system by The Trade Desk has also contributed to recent stock dips, despite Roku's established user base [9]. Group 5: Valuation Potential - Roku's current valuation is significantly lower than Netflix's, with a P/S ratio over 10, suggesting that if Roku can improve its valuation, it could lead to substantial returns for investors [11]. - The potential for Roku to double its share price exists if it can achieve a higher valuation while maintaining double-digit revenue growth [11][12].