Roku Stock

Increasing competition for streaming ad dollars could lead to lower revenues for the next five years.

Unlike the established linear networks with robust upfront ad sales, Roku is still very dependent on the near-term scatter market that advertisers can curtail quickly. The firm disclosed that the ad scatter market weakened tremendously in the second quarter as consumers pulled back on spending. Net new account activations of 1.6 million was the firm’s second highest second quarter, beaten only by the pandemic-influenced second quarter of 2020.

The company posted earning losses of 82 cents per share and revenues of $764 million, both well below consensus estimates, as the ad sales and device sales ...

Other tech companies that rely a lot on advertising business also posted poor second-quarter results recently. "However, macro headwinds such as rising inflation and supply chain disruptions are having a severe impact on the business – both on the advertising side and the engagement side through lower consumer discretionary spending." Roku attributed the loss to tough macroeconomic conditions such as inflation and supply chain that could hurt the selling of Roku TV and other devices.

Shares of Roku Inc. were tumbling in premarket trading Friday after the streaming company acknowledged a "significant slowdown" in advertising spending that ...

“There is significant runway ahead for shifting ad dollars from linear TV to digital, and Roku is poised to take meaningful share of this shift.” “Roku’s 2Q22 featured ad-recession headwinds that as the earnings cycle progressed had become increasingly predictable,” he wrote. “While that could happen later in this cycle, in the near term it looks as though marketers are cutting budgets on CTV because they can. “Obviously, this is not an ideal market structure,” the analysts wrote. “We expect these challenges to continue in the near term as economic concerns pressure markets worldwide” Roku faces its own challenges, in their view, since the company must compete with tech giants and TV makers as it tries to ensure that more people stream content on Roku devices or platforms.

Shares traded at $65.20, down from $85.17 at the close on Thursday and a 52-week high of $449.60 a year ago. “Roku reported a frankly awful 2Q and 3Q guidance ...

“Roku’s growth is slowing as advertisers ‘significantly curtail or pause spend in the scatter market," Cahall said, quoting Roku’s letter to shareholders. “While the company was clear that a consumer slowdown in player sales were to blame, we think the scale of this deceleration (2Q 2022 revenue growth was 18% vs. “Despite all of these concerns, we could not have imagined the incredibly weak 3Q 2022 guide of only 3% growth in total net revenues vs.

In this video, I will be going over Roku's (NASDAQ: ROKU) second-quarter earnings report. While its operating system (OS) is still the No.

Neil Rozenbaum has positions in Roku. The Motley Fool has positions in and recommends Roku. The Motley Fool has a disclosure policy. They just revealed what they believe are the ten best stocks for investors to buy right now... Neil is an affiliate of The Motley Fool and may be compensated for promoting its services. The video was published on July 29, 2022. When our award-winning analyst team has a stock tip, it can pay to listen. In this video, I will be going over Roku's (NASDAQ: ROKU) second-quarter earnings report.

Susquehanna downgraded the stock to "neutral" from "positive," with a price-target cut to $70 from $200, while no fewer than seven other analysts slashed their ...

The streaming name posted disappointing second-quarter results and withdrew its full-year growth rate estimate, as ad spending slows down. Expiring today, the weekly 7/29 60-strike put is the most popular, with new positions being bought to open there. Year-to-date, the equity is down 71.6%.

Roku missed on revenue, EPS, and produced terrible Q3 guidance & pulled its full-year forecast. See why I'm lowering my rating on ROKU stock to Buy.

My investment thesis for Roku remains intact, but it is clear that both the economy and Roku itself are heading into a difficult period. We do -- our business model is to focus first on scale, and then second on monetization, most international companies, we haven't started monetization yet, so that, it is something that will come in the future primarily focus on scale, at least for now on international. Roku is the number one streaming platform in the United States, but also in Canada and Mexico. We're growing fast in Brazil and Latin America generally doing well starting to make good progress in the UK. And we just recently launched in Germany. The company is continuing to win advertising share and grow advertising accounts, as it benefits from this secular tailwind. There's a lot of negativity in the revenue results, and with good reason - I think Roku shares deserve the trouncing that they are getting today. I have also assumed a slower improvement over time in FCF margins, as the impact of the macroeconomic environment continues to hurt Roku. Management guided for revenue of ~$805m, and analysts also expected a very similar figure of ~$804m, so the actual revenue figure of $764.4m is one of the reasons that shares have taken a whack. Roku also missed analyst estimates in terms of EPS. Whilst I don't pay too much attention to this, since Roku doesn't provide EPS guidance & it is not yet aiming for EPS maximisation, a miss on EPS can highlight margin issues. The biggest revenue driver for Roku is digital advertising, and these are gained through its OneView advertising platform that brands use to advertise on the Roku platform. Is this representative of a macroeconomic environment that is rapidly deteriorating, or is this a sign that management failed to appropriately manage shareholder's expectations? Roku itself the leading TV streaming platform in the United States, Mexico, and Canada (by hours streamed) and has been driving a shift from linear TV to streaming over the past decade. The transition from linear TV to streaming has been well under way for years, and it will continue to be a secular tailwind throughout the next decade.

Macroeconomic headwinds took a toll on the streaming video company in the second quarter.

To make matters worse, the company saw a slowdown in consumer discretionary spending last quarter, and management "expect[s] these challenges to continue in the near term." Those who buy now and hold on will look back on the purchase as a smart move in five years. Total net revenue grew 18% year over year to $764 million, but the results of its segments were mixed. In its letter to shareholders, Roku noted that there was a "significant slowdown in TV advertising spend due to the macro-economic environment." As a result, the company swung from a profit to a net loss of $112 million, or $0.82 per share. Sales from its platform segment -- which consists of digital advertising, The Roku Channel, and licensing revenue from its smart-TV operating system -- grew 26% year over year.

Pivotal Research analyst Jeffrey Wlodarczak says the stock is likely to remain under pressure, noting that expenses are rising fast as the economy weakens.

and Google—rivals in the streaming business—are gaining more power. Jeffrey Wlodarczak, who rates the stock at Hold, noted that expenses are rising fast as the economy moves toward a recession, and at a time when Roku stock cratered after the video-streaming company’s earnings fell far short of expectations, and a Pivotal Research analyst doesn’t expect it to bounce back.

Roku (ROKU) posted worse than expected earnings late Thursday that persuaded the market that the worst is not yet over. ROKU stock showcased an $-0.8.

The author makes no representations as to the accuracy, completeness, or suitability of this information. The author has not received compensation for writing this article, other than from FXStreet. The author will not be held responsible for information that is found at the end of links posted on this page. This is likely at least partly the fault of the RSI sitting in overbought territory for so long during the pandemic boom in streaming. It also does not guarantee that this information is of a timely nature. This figure is well below the mid-pandemic figure of 14.3 million accounts in a 12-month period.