Core Viewpoint - The consumer discretionary sector has shown moderate growth over the past year, but is currently experiencing a negative year-to-date performance, prompting the identification of five stocks with potential for investment despite the sector's recent slump [2][4]. Consumer Discretionary Sector Overview - The consumer discretionary sector is characterized as growth-oriented, with share prices expected to increase over the long term. This sector is sensitive to market interest rate movements and typically exhibits an inverse relationship with them [3]. Interest Rate Impact - The Federal Reserve's recent easy monetary policies, including significant cuts to the benchmark lending rate, have created uncertainty regarding interest rate trajectories for the current year. Additionally, concerns about AI's impact on corporate profits have affected growth-oriented stocks [4]. Selected Stocks for Investment - Five consumer discretionary stocks have been identified for investment based on their favorable Zacks Rank: Ralph Lauren Corp., Roku Inc., Airbnb Inc., FOX Corp., and Carnival Corporation & plc. Each stock carries a Zacks Rank of 1 (Strong Buy) or 2 (Buy), with potential for double-digit price upside in the short term [5]. Ralph Lauren Corp. (RL) - Ralph Lauren has a Zacks Rank of 2 and is benefiting from its "Next Great Chapter: Drive Plan," which emphasizes brand elevation and operational agility. The company expects revenue growth in the high-single to low-double digits for fiscal 2026, with gross margin increasing by 40-80 basis points and operating margin expanding by 100-140 basis points [6][7]. - The expected revenue and earnings growth rates for Ralph Lauren are 11.7% and 30.5%, respectively, for the current year, with a short-term average price target indicating an 11.8% increase from the last closing price of $369.18 [8]. Roku Inc. (ROKU) - Roku holds a Zacks Rank of 1, showcasing strong platform revenue growth driven by innovative advertising and streaming services. The company has achieved significant household penetration and improved profitability through strong free cash flow generation [9][10]. - Roku's expected revenue and earnings growth rates are 15.4% and over 100%, respectively, for the current year, with a short-term average price target suggesting a 35.7% increase from the last closing price of $90.06 [13]. Airbnb Inc. (ABNB) - Airbnb has a Zacks Rank of 2 and is experiencing growth in Nights and Experiences Booked, positively impacting its Gross Booking Value. The company benefits from increasing guest demand and a recovery in cross-border travel [14][15]. - The expected revenue and earnings growth rates for Airbnb are 10.8% and 18.1%, respectively, for the current year, with a short-term average price target indicating a 20.4% increase from the last closing price of $121.35 [16]. FOX Corp. (FOX) - FOX has a Zacks Rank of 1 and produces a variety of content, including news and sports. The expected revenue and earnings growth rates for FOX are -0.9% and -2.3%, respectively, for the current year, but the Zacks Consensus Estimate for earnings has improved by 6.9% over the last 30 days [17]. - The short-term average price target for FOX suggests a 36.1% increase from the last closing price of $51.56 [18]. Carnival Corporation & plc (CCL) - Carnival has a Zacks Rank of 1 and is benefiting from strong demand, increased booking volumes, and a focus on marketing to attract new customers. The company emphasizes the role of digital marketing and AI in enhancing effectiveness [19][20]. - The expected revenue and earnings growth rates for Carnival are 4.6% and 12.9%, respectively, for the current year, with a short-term average price target indicating a 19.1% increase from the last closing price of $31.77 [21].

Streaming platform specialist Roku (ROKU) is back in the spotlight, and this time, it’s not hype driving the buzz. It’s hard numbers. The company’s fiscal 2025 fourth-quarter results, released last week, didn’t just top Wall Street’s expectations - it staged a powerful turnaround and provided an optimistic financial outlook. Roku swung from a loss in the year-ago quarter to posting a meaningful profit in Q4, marking a major shift in momentum. Of course, the market has taken notice. Since delivering that ...

Core Insights - Roku Inc. shares increased over 10% intra-day following the release of fourth-quarter earnings that surpassed analyst expectations and provided optimistic guidance for 2026 [1] Financial Performance - The company reported an adjusted EPS of $0.53, significantly higher than the consensus estimate of $0.27 [2] - Total revenue reached $1.38 billion, aligning with analyst expectations and reflecting a 16% year-over-year growth [2] - Platform revenue, which encompasses advertising and content distribution, grew by 18% to $1.22 billion, while Devices revenue saw a 3% increase to $171 million [2] Future Projections - For Q1 2026, Roku forecasts revenue of $1.2 billion, surpassing the consensus estimate of $1.17 billion [3] - The full-year revenue for 2026 is projected to be $5.5 billion, exceeding analyst projections of $5.34 billion [3] - Streaming hours increased by 15% year-over-year, totaling 145.6 billion for the full year of 2025 [3] Advertising and Market Position - Roku noted robust growth in advertising, with video advertising growth on its platform outpacing the U.S. OTT market and the broader digital advertising industry in 2025 [4] - The Roku Channel was the second most engaged app on the platform in the U.S., accounting for 6.3% of total TV streaming in December 2025, up from 4.6% the previous year [3] - The company anticipates reaching 100 million streaming households globally by 2026 [4] Revenue Growth Expectations - For 2026, Roku expects Platform revenue growth of 18% to $4.89 billion, with a gross margin projected between 51% and 52% [4] - The company aims to maintain disciplined operations while continuing to invest in platform expansion [4]

Core Insights - Roku reported fourth-quarter 2025 earnings of 53 cents per share, surpassing the Zacks Consensus Estimate of 28 cents, and reversing a loss of 24 cents per share from the previous year [1][9] - Revenues increased by 16.1% year-over-year to $1.39 billion, exceeding the consensus mark by 3.12% [1][9] Financial Performance - Platform revenues, which account for 87.7% of total revenues, rose 18.2% year-over-year to $1.22 billion, driven by strong streaming services distribution and video advertising [6] - Device revenues, making up 12.3% of total revenues, grew 3.2% year-over-year to $170.9 million, with gross margin improving by 530 basis points to negative 23.3% [6] - Adjusted EBITDA for the quarter was $169.4 million, reflecting a 119% year-over-year increase, with an adjusted EBITDA margin improvement of 570 basis points to 12.1% [10] Operating Metrics - Gross margin as a percentage of total revenues expanded by 80 basis points year-over-year to 43.5% [7] - Operating expenses decreased by 2% year-over-year to $540.8 million, reducing the percentage of total revenues from 45.9% to 38.8% [7] Segment Highlights - Advertising performance benefited from Roku's scale of over 90 million logged-in streaming households, with The Roku Channel ranking as the 2 app by engagement in the U.S. [3] - The fourth quarter saw record net adds for Premium Subscriptions, supported by holiday promotions and enhancements to the Roku Experience [4] Guidance and Projections - For Q1 2026, Roku estimates total net revenues of approximately $1.2 billion, an 18% year-over-year increase, with platform revenues expected to grow by 21% [12] - For the full year 2026, Roku projects total net revenues of $5.50 billion, with platform revenues of $4.89 billion, representing 18% year-over-year growth [13]

Here's a look at the key figures from the quarter. ROKU stock is moving. Watch the price action here.Roku Rocks Q4Roku reported quarterly earnings of 53 cents per share, which beat the consensus estimate of 27 cents by 93.43%, according to data from Benzinga Pro.Quarterly revenue came in at $1.4 billion, which beat the analyst consensus estimate of $1.35 billion and was up from $1.2 billion in the same period last year.The company reported the following fiscal 2025 highlights: Total net revenue was $4.74 bi ...

Core Insights - Netflix's 2026 content slate is a crucial factor for stock performance, aiming to convert programming investments into sustained subscriber growth and engagement gains [1] - The Zacks Consensus Estimate for Netflix's 2026 revenues is $50.99 billion, reflecting a 13.08% year-over-year increase, driven by expectations of robust content pipeline leading to subscription and advertising revenue growth [1][8] Content Strategy - The film portfolio includes high-profile releases such as The Rip (Jan. 16), The Animals (March 27), and Narnia: The Magician's Nephew (December 2026), designed to enhance subscriber engagement and attract advertisers [2] - A diverse range of original series launches throughout 2026, including Star Search (Jan. 20) and Bridgerton Season 4, aims to capture various audience segments and drive subscriber acquisition [3] Financial Considerations - While content strength positions Netflix for potential upside, significant capital allocation and existing debt obligations create financial pressures, impacting operating margins [4] - The platform's ability to translate content investments into revenue growth and profitability is critical amid increasing competition in the streaming market [4] Competitive Landscape - Netflix faces intense competition from Amazon and Roku, both of which leverage content to drive streaming hours, with Amazon focusing on franchises and live sports, while Roku adopts a lower-cost, advertising-focused approach [5] Valuation and Performance - Netflix shares have declined 27.2% over the past six months, compared to a 12.8% decline in the Zacks Broadcast Radio and Television industry [6] - The forward price-to-sales ratio for Netflix is 7.83X, indicating it may be overvalued compared to the industry average of 4.3X [9] - The Zacks Consensus Estimate for Netflix's 2026 EPS is $3.21, reflecting a 26.93% increase from the previous year [11]

Core Insights - Roku's platform revenues are primarily driven by advertising activities and streaming services distribution, providing a diversified revenue structure that supports growth [1][8] Advertising Revenue - Advertising is the main driver of Roku's platform momentum, with integrations expanded with major demand-side platforms like Amazon DSP, Trade Desk, and FreeWheel, enhancing access for advertisers [2] - Programmatic transactions are increasing, leading to improved demand access and monetization efficiency, with nearly 90% of advertisers using Roku Ads Manager being new to the platform [2] Streaming Services Distribution - Streaming services distribution serves as a second growth driver, with subscriptions benefiting from enhanced content discovery and AI-powered recommendations [3] - Roku's upcoming content slate for 2026 includes original titles and third-party content, which is expected to boost engagement [3] Financial Estimates - The Zacks Consensus Estimate for Roku's fourth-quarter 2025 platform revenues is $1.12 billion, reflecting a 14.5% year-over-year growth [4] - The earnings estimate for the same quarter is 28 cents per share, indicating improvement from a loss of 24 cents per share in the previous year [11] Competitive Landscape - Roku faces increasing competition from Netflix and Disney, both of which are expanding ad-supported streaming and subscription monetization [5] - Unlike its competitors, Roku monetizes viewing across multiple apps at the platform level rather than through single-service control models [5] Stock Performance and Valuation - Roku's shares have increased by 27.5% over the past six months, outperforming the Zacks Broadcast Radio and Television industry's decline of 15.5% [6] - The stock is currently trading at a forward Price/Sales ratio of 3.11X, lower than the industry's 4.3X, and carries a Value Score of D [9]

Core Insights - The streaming revolution has significantly changed consumer access to entertainment, with Roku and Netflix being major beneficiaries of the shift from traditional cable television [1] - Both companies are experiencing growth due to expanding user bases, increased streaming hours, and strategies aimed at enhancing user engagement [2] Roku's Position - Roku's platform-agnostic model provides a structural advantage, connecting 85.5 million streaming households and recording 32 billion streaming hours in Q3 2025 [3] - The Roku Channel is the second most popular app on the platform, generating over 1.6 billion streaming hours in Q3 [4] - Roku's diverse revenue model includes home screen advertising, subscription revenue sharing, and device licensing fees, benefiting from a 20% year-over-year increase in streaming hours [5] - The Zacks Consensus Estimate for Roku's 2026 EPS is $1.21, reflecting a 265.6% year-over-year growth [6] Netflix's Position - Netflix operates a content-first model, ending Q3 2025 with over 301.6 million paid subscribers and achieving a TV view share of 8.6% in the U.S. [7] - The 2026 content slate includes returning series and new titles, which are expected to support viewing events [8][9] - Netflix is diversifying its monetization through an advertising-supported tier and gaming initiatives, while also expanding into live sports programming [10] - The Zacks Consensus Estimate for Netflix's 2026 EPS is $3.21, indicating a year-over-year growth of 26.93% [12] Market Performance - Over the past six months, Roku shares have increased by 12.6%, while Netflix shares have decreased by 22.6%, reflecting a preference for Roku's asset-light model [15] - Despite recent share price weakness, Netflix trades at a premium with a forward twelve-month P/E of 7.79x compared to Roku's 3.07x, indicating different market perceptions of their business models [18] Conclusion - Roku's asset-light platform model offers broader exposure to streaming growth and improved monetization, while Netflix's content-heavy approach involves higher capital investment and debt [21] - Currently, Roku appears better positioned on a risk-reward basis, while Netflix may present a more attractive entry point in the future [21]

Core Insights - Nielsen and Roku have expanded their long-term strategic partnership to incorporate Roku data into Nielsen's advanced campaign measurement and outcome solutions [1][2] - This partnership aims to provide advertisers with a more accurate view of audience engagement across streaming services, leveraging Roku's data [2][5] Group 1: Partnership Details - The expanded partnership will utilize Roku's large-scale TV data for Nielsen's Big Data + Panel measurement, enhancing accuracy for both Linear and Streaming Ratings [2][4] - Roku will gain access to Nielsen's Streaming Platform Ratings, which analyze audience engagement with subscription and ad-supported services [3][6] Group 2: Market Insights - Approximately 70% of TV streaming hours are now ad-supported, highlighting the growth of ad-supported services like The Roku Channel, which is the second-largest streaming app by ad-supported TV time [3][5] - Nielsen measures over 1 trillion minutes of viewing across all streaming apps in a typical month, reinforcing its position as a leader in streaming TV measurement [4][7] Group 3: Strategic Goals - The partnership aims to improve the TV advertising system by focusing on interoperability and performance, providing advertisers and publishers with best-in-class measurement and insights [6][5] - Nielsen's innovations, including accreditation for its Big Data + Panel measurement, are set to enhance the effectiveness of advertising transactions [7]

Core Insights - Streaming content is defined as audio or video files that can be played online without full downloads, enhancing user experience by reducing wait times based on internet speed [1] - The streaming ecosystem consists of four main categories: film and TV studios, live media producers, game publishers and developers, and user-generated content [1] Company Summaries Fox Corp. (FOXA) - FOXA reported strong Q1 fiscal 2026 results with adjusted earnings per share at $1.51 and a revenue increase of 4.9% year over year [6] - The Cable Network Programming segment achieved a 48% EBITDA margin, with revenues rising 4% to $1.66 billion, while Tubi reached profitability earlier than expected with a 27% revenue growth [6] - Total advertising revenues grew by 6% to $1.41 billion, supported by FOX News' premium pricing and NFL ratings averaging 22 million viewers, with upcoming events like Super Bowl LIX and FIFA Men's World Cup expected to drive further advertising revenue [7] - FOXA has $4.4 billion in cash and plans $1.5 billion in share repurchases, maintaining financial flexibility amid rising sports programming costs and competition [7] - Expected revenue and earnings growth rates for FOXA are -1.3% and -7.7% respectively for the current year, with a 5% improvement in the Zacks Consensus Estimate for earnings in the last 30 days [9] Roku Inc. (ROKU) - ROKU delivered strong Q3 2025 results, surpassing earnings and revenue estimates, achieving positive operating income for the first time since 2021 [10] - Platform revenues increased by 17% year over year, driven by streaming services distribution and video advertising [10] - The Roku Channel maintained a strong position in U.S. television streaming, capturing 6.2% of streaming time, with free cash flow generation growing by 182% year over year [11] - ROKU raised its 2025 platform revenue outlook to $4.11 billion, indicating sustained monetization momentum [11] - Expected revenue and earnings growth rates for ROKU are 14.1% and over 100% respectively for the current year, with an 83.3% improvement in the Zacks Consensus Estimate for earnings in the last 30 days [11] Sony Group Corp. (SONY) - SONY is experiencing growth in its Game & Network Services (G&NS), Music, and Imaging & Sensing Solutions (I&SS) segments, despite challenges in Pictures and Entertainment, Technology & Services (ET&S) [12] - Increased engagement in PlayStation is boosting G&NS, while the Music segment benefits from higher streaming in Recorded Music and Publishing [12] - Solid sales of image sensors for mobile devices and cameras are supporting I&SS, with Crunchyroll contributing to subscriber growth in the Pictures unit [13] - SONY's operating income is expected to decrease to approximately ¥70 billion, down ¥30 billion from previous estimates, due to various factors including inventory management and production diversification [13] - Expected revenue and earnings growth rates for SONY are 2% and -2.4% respectively for the current year, with a 4.3% improvement in the Zacks Consensus Estimate for earnings in the last seven days [14]