Roku Fundamentals Sound, But Analyst Sees Stock As Risky

The high-flying OTT streaming platform Roku was slowed on Tuesday after “neutral” support was given by one analyst.

Roku’s stock price was down more than 6% in early Tuesday trading to $89.78. Roku’s stock has been up 250% since last December and 50% higher for the month of May.

At the beginning of the year, Roku’s stock was trading at $29.82.

Kyle Evans, media analyst for Stephens, says that while the fundamentals of the company continue to be “strong,” the valuation of the Roku’s stock price has grown to a high risk level.

For some time, Roku has been viewed as the leading set-top device/platform for streaming TV video and apps in the U.S.

But at an industry conference recently, an Amazon executive revealed that the company's set-top-box streaming platform, Amazon Fire TV, now says it has 34 million users — making it the leading OTT platform, overtaking Roku.



Earlier this year, Roku said it had 29.1 million “active accounts” -- 2 million higher than cited in a previous company release. In one estimate, eMarketer says Roku ad revenues will grow to $632.9 million in 2020 from $433 million in ad revenues in 2019 -- with much of this coming from the Roku Channel.

Overall 2018 annual revenue for Roku grew 45% to $742.5 million from the year before.

1 comment about "Roku Fundamentals Sound, But Analyst Sees Stock As Risky".
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  1. John Grono from GAP Research, May 29, 2019 at 5:24 p.m.

    "Active accounts" is only meaningful when accompanied with the period of actiity.   Was it per day, per week, per month, per annum.

    The most meaningful would be Average Daily Active Accounts, along with Average Daily Actibe Minutes.

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