Roku's (ROKU) stock is what you might call a mixed bag. It has climbed by nearly 65% year-to-date but is down about 52% over the last twelve months.
The Bull Case
Roku's case for relevance is, in part, about population – at the end of 2022, there were 70 million Roku accounts. However, that definition of active accounts doesn't actually get at the full scope of Roku's reach.
“By implication, Roku’s population reach is 2x higher than its reported active accounts,” in a Feb. 23 note to investors. Roku's reach, in other words, is bigger than it looks.
Additionally, Roku sits right in the center of the streaming wars and could be poised to be a winner no matter how the rest of the sector plays out.
“Roku is a key beneficiary of streaming growth, regardless of which streaming service wins – it is an arms dealer,” noting that the company's advertising and monetization possibilities grow as the streaming marketplace expands.
The Bear Case
The company faces steep competition from Alphabet, Amazon, Apple, Samsung, Vizio, and LG. It's also faced “chronic” losses, in addition to the company's “anemic international growth with 60 million US active accounts vs 10mm international active accounts” at the end of 2022.
For Q4 2022, the company's operating losses grew to $249.9 million, a staggering decline from the same quarter in 2021, where the company's operating income was about $21.4 million.
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