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Roku Inc Class A ROKU

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Roku Ends 2020 With Strong Q4; Account Growth Benefiting From Lockdown Restrictions

Neil Macker, CFA Senior Equity Analyst

Analyst Note

| Neil Macker, CFA |

Roku ended 2020 with a strong fourth quarter as revenue and operating income both beat FactSet consensus projections. The firm added 5.2 million accounts in the quarter and over 14 million in 2020 as the pandemic restrictions provided a tailwind to the secular trend toward streaming. With the vast majority of its 51.2 million subscribers in the U.S., Roku’s international expansion will continue to grow in importance with respect to new customer net additions. However, the potential growth in streaming hours and ad dollars means the U.S. will still drive top-line expansion for the near to medium term. We are maintaining our no-moat rating and plan to raise our $150 fair value estimate to account for faster subscriber and streaming hours growth.

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Company Profile

Business Description

Roku is the leading streaming platform in the U.S. by hours watched with over 40 billion hours of content streamed in 2019. The firm's eponymous operating system is used not only in Roku's own hardware but in co-branded TVs and soundbars from manufacturers like TCL, Onn, and Hisense. Roku generates revenue from advertising, distribution fees, hardware sales, OS licensing, and subscription sales.

150 Winchester Circle
Los Gatos, CA, 95032
T +1 408 556-9040
Sector Communication Services
Industry Entertainment
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Distressed
Employees 1,925