tl;dr
Roku's (NASDAQ:ROKU) ability to expand its free cash flow and reach positive annual EBITDA earlier than expected prompted Wedbush to reiterate its Outperform rating on the streaming TV and hardware provider. "We believe Roku has found religion in generating and expanding FCF, and will not revert to ...
Roku's (NASDAQ:ROKU) ability to expand its free cash flow and reach positive annual EBITDA earlier than expected prompted Wedbush to reiterate its Outperform rating on the streaming TV and hardware provider. "We believe Roku has found religion in generating and expanding FCF, and will not revert to excessive spending for long-term growth," said Wedbush analysts Alicia Reese, Michael Pachter and Brandon Barron in a Friday note. "Instead, Roku intends to balance new initiatives that result in near-term ROI with expanding FCF and tracking toward positive net income." Roku also continues to grow its market share as advertising dollars venture away from linear TV to digital connected TV, Wedbush notes. However, Wedbush also reduced its price target on Roku by 33%, lowering it to $80 from $120. Roku was down 1% in premarket trading Friday. "Coupled with industry-wide headwinds in media and entertainment spending, we think Roku’s focus on expanding positive EBITDA in 2024 may inhibit its ability to compete on the ecommerce front," Reese added. "We did not include any revenue from ecommerce in our model, but our premium multiple included upside from it." In order to fare better against its competitors, such as Vizio (VZIO), Amazon (AMZN), and Google (GOOG)(GOOGL), Roku needs to improve its automatic content recognition capabilities, Wedbush noted. This allows advertisers to match up geography, demographics, and content by genre to offer more customizable ads. Roku is slated to release its first quarter financial results post-market on Thursday, April 25. A consensus of analysts expects a loss per share of $(0.64) on $850.55M in revenue. Wedbush expects slightly better figures, with a loss per share of $(0.61) on revenue of $855M. Roku has a Hold rating from Seeking Alpha analysts, Wall Street analysts, and Seeking Alpha's Quant system, which routinely beats the market.
More about Roku Inc
Roku Inc Summary Roku Inc Summary
Roku, Inc. operates a TV streaming platform. The company is headquartered in San Jose, California.
Industry: TECHNOLOGY
Sector: CABLE & OTHER PAY TELEVISION SERVICES
Employees: 8423306000
Revenue: $3,484,619,000
Net Income: -$5.01
EBITDA: $24.61
EPS: -$0.204
Market Cap: $8,377,000,000
PE Ratio: -0.649
Dividend Yield: 0.135
More about Vizio Holding Corp
VIZIO Holding Corp. Stock Analysis
Company: VIZIO Holding Corp.
Headquarters: Irvine, California
Industry: Manufacturing, Household Audio & Video Equipment
Market Cap: $2,125,940,000
Stock Price: $76.71
Dividend Yield: None
P/E Ratio: 8.56
EPS: $0.0168
Revenue: $1,680,000,000
ROE: 10.69%
Beta: 1.117
Volatility: -0.058
More about Amazon.com Inc
Company: Amazon.com Inc
Industry: Trade & Services, Retail-Catalog & Mail-Order Houses
Market Cap: 186.44 billion
PE Ratio: 61.8
Dividend Yield: None
EPS: 2.9
52-Week High: 55.78
52-Week Low: 0.0529
Shares Outstanding: 574.78 million
Price: 198.96
Change: 50.69
Change %: 0.139
More about Alphabet Inc Class C
Alphabet Inc. Class C Summary Alphabet Inc. is an American multinational conglomerate headquartered in Mountain View, California. It was created through a restructuring of Google on October 2, 2015, and became the parent company of Google and several former Google subsidiaries. The two co-founders of Google remained as controlling shareholders, board members, and employees at Alphabet. Alphabet is the world's fourth-largest technology company by revenue and one of the world's most valuable companies.
Industry: TECHNOLOGY, SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC.
Market Cap: $1,947,764,523,000
PE Ratio: 27.15
Dividend Yield: None
EPS: 5.8
52-Week High: $1,524.34
52-Week Low: $1,175.24
Volatility: 0.24
Average Volume: 307,393,987,000
Stock Price: $1,155.62
Change: 0.56
Change %: 0.135
More about Alphabet Inc Class A
Alphabet Inc Class A
Alphabet Inc. is an American multinational conglomerate headquartered in Mountain View, California. It was created through a restructuring of Google on October 2, 2015, and became the parent company of Google and several former Google subsidiaries. The two co-founders of Google remained as controlling shareholders, board members, and employees at Alphabet. Alphabet is the world's fourth-largest technology company by revenue and one of the world's most valuable companies.
Sector: Technology
Industry: Services-Computer Programming, Data Processing, etc.
Market Cap: 194.8 billion
P/E Ratio: 26.9
Dividend Yield: None
Beta: 5.8
EPS: 24.34
Vol Avg (3m): 0.24
Shares Outstanding: 3.073 billion
Public Float: 307.393 billion
Book Value: 166.12
Price to Book: 0.56
Forward P/E: 0.135
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