Key Points Roku's stock is up 73% over three years, roughly matching the S&P 500's gains despite massive volatility along the way. Patient investors who bought during the 2022 crash are already seeing huge gains. Roku doesn't compete with Netflix or Disney -- it's the neutral platform where all streaming services live and advertise. 10 stocks we like better than Roku › About five years ago, in February 2021, Roku (NASDAQ: ROKU) was riding high on pandemic tailwinds. Less than three months later, ...

Core Viewpoint - Netflix has announced a 10-for-1 stock split, effective after the market closes on November 14, 2025, aimed at increasing accessibility for retail investors and providing flexibility for employee stock options [1][2][6]. Company Overview - Current stock price is approximately $1,089.70, with a market capitalization of $461 billion [3]. - The stock has experienced a 10% drop recently due to a one-time noncash Brazilian tax bill of $619 million, which impacted the market cap by $46 billion [9]. Historical Context - This is Netflix's third stock split, following a 2-for-1 split in 2004 and a 7-for-1 split in 2015, resulting in a significant increase in share count for long-term investors [4][6]. Market Reaction - Following the announcement of the stock split, Netflix's stock price increased by approximately 3% in after-hours trading, indicating positive market sentiment [8]. Financial Implications - The stock split does not change the overall investment value; for example, 10 shares worth $10,900 will become 100 shares worth the same total [5]. - The split is primarily seen as a psychological boost for investors, making shares appear more affordable [8]. Strategic Considerations - The split is intended to make shares less daunting for retail investors, as the price per share would decrease to around $109 post-split, compared to a previous high of about $15,246 [6]. - The company remains focused on its business strategies and financial results, which are the primary drivers of long-term stock performance, rather than the stock split itself [10].

Core Viewpoint - Roku is considered undervalued in the streaming market and is expected to recover and grow in the coming years despite current challenges [1][11]. Company Performance - Roku's stock is trading at 2.9 times trailing sales, indicating a valuation more akin to struggling retailers than to its entertainment technology peers [4]. - The stock has decreased by 9% in the past month, with a beta of 2.1, suggesting high volatility and risk [5]. - Active accounts increased by 16.8% and 16.5% in the first two quarters of 2023, despite flat revenue growth [6][7]. Customer Growth - Roku's customer count has grown by 28.3% over the past two years and 49.4% since the end of 2021, indicating a strong foundation for future growth [8]. - The company maintained its pricing strategy during inflation, which helped it gain customers while competitors raised prices [7]. Future Outlook - Recovery in profitability is expected to take more than a year, but Roku has raised prices in 2024 and anticipates a more favorable economic environment [9]. - The advertising business is expected to evolve, contributing to increased profitability by 2025 [10].