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Roku Inc Class A ROKU

Morningstar Rating
$64.48 +1.19 (1.88%)
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Company Report

Roku Earnings: Solid Results, but Cautious Outlook and Vizio/Walmart Rumors Weigh on the Stock

Roku's fourth-quarter results exceeded our expectations, and the firm is well ahead of schedule to reach profitability. We think the significant stock decline in after-hours trading was a major overreaction to a muted outlook for the next quarter and some cautious commentary. However, we think the stock had gotten ahead of itself, and the market is also skittish about rumors that Walmart is looking to acquire Vizio, a major Roku competitor. We're maintaining our $75 fair value estimate, leaving the stock fairly valued after the selloff.

Price vs Fair Value

ROKU is trading at a 14% discount.
Price
$64.48
Fair Value
$15.00
Uncertainty
Very High
1-Star Price
$996.56
5-Star Price
$38.20
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Roku is well positioned to take advantage of the secular trend toward increased content streaming in the U.S. and aboard.

Bears

Despite its tremendous subscriber growth, Roku has yet to generate operating income, and there may not be substantial leverage in the current business model.

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News

Trading Information

Previous Close Price
$63.29
Day Range
$62.8565.20
52-Week Range
$51.62108.84
Bid/Ask
$64.40 / $64.44
Market Cap
$9.25 Bil
Volume/Avg
8.5 Mil / 7.2 Mil

Key Statistics

Price/Earnings (Normalized)
Price/Sales
3.81
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Roku is the leading streaming platform in the U.S. by hours watched with 87.4 billion hours of content streamed in 2022. The firm’s namesake operating system is used not only in Roku’s own hardware but in cobranded TVs and soundbars from manufacturers like TCL, Onn, and Hisense. Roku generates revenue from advertising, distribution fees, hardware sales, OS licensing, and subscription sales.
Sector
Communication Services
Industry
Entertainment
Stock Style Box
Mid Growth
Total Number of Employees
3,150

Competitors

Valuation

Metric
ROKU
AMZN
AAPL
Price/Earnings (Normalized)
60.1928.68
Price/Book Value
5.638.7938.42
Price/Sales
3.813.127.50
Price/Cash Flow
108.8518.5924.04
Price/Earnings
ROKU
AMZN
AAPL

Financial Strength

Metric
ROKU
AMZN
AAPL
Quick Ratio
2.230.700.92
Current Ratio
2.410.981.07
Interest Coverage
−957.127.45
Quick Ratio
ROKU
AMZN
AAPL

Profitability

Metric
ROKU
AMZN
AAPL
Return on Assets (Normalized)
−4.90%9.11%32.04%
Return on Equity (Normalized)
−8.36%26.76%174.73%
Return on Invested Capital (Normalized)
−6.57%14.52%63.75%
Return on Assets
ROKU
AMZN
AAPL
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