1 Growth Stock Down 37% to Buy Right Now

Core Viewpoint - Roku is experiencing a resurgence in its stock performance, gaining 23% over the last six months, but remains undervalued compared to its growth potential and historical highs [1][2]. Company Strategy - Roku is classified as a classic growth stock, focusing on revenue growth rather than immediate profit optimization, investing heavily in research and development as well as sales and marketing [3][4]. - The company has been emulating Netflix's growth strategy from 2016-2017, which saw significant annual sales growth due to similar spending ratios [5]. Financial Performance - Roku's revenues increased by 18% in 2024, with a notable 22% growth in the fourth quarter, indicating an acceleration in business expansion following a slowdown during the inflation crisis of 2022 [6]. - The stock is currently trading at 3.2 times trailing sales, comparable to Nike's 2.5 times, despite Roku's faster growth rate [7][8]. Market Position and Global Expansion - Roku is a leader in the North American streaming market but has only begun to explore international opportunities, with CEO Anthony Wood highlighting growth trends in Latin America and the UK [9][10]. - The company is prioritizing the scale of streaming households in international markets over immediate monetization, suggesting a long-term growth strategy [11]. Future Outlook - Roku's stock is perceived as widely misunderstood, with significant potential for growth as it catches up to a fair market value, making it an attractive investment opportunity [12].