ROKU (NASDAQ:ROKU)

CAPS Rating: 2 out of 5

Caps

How do you think ROKU will perform against the market?

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All Players

91 Outperform
38 Underperform
 

All-Star Players

21 Outperform
20 Underperform
 

Wall Street

2 Outperform
0 Underperform
 

Top ROKU Bull/Bear Pitches

The best Bull and Bear pitches based on recency and number of recommendations.

SaintCroix (98.76)
Submitted January 13, 2018

Competing with Amazon, Google, and Apple--and winning! All the mega cap media plays are at war with each other. Amazon sniping at Google, Netflix fighting with Disney. I feel like Roku, harmless little small cap Roku, will do better than all of those… More

QueenAnneFool (< 20)
Submitted February 10, 2018

There is no intellectual property or anything particularly unique about this company's products. Essentially anyone who wants to get into the hardware business can compete with Roku. And some of the biggest companies do: Apple, Amazon. They also do… More

ROKU VS S&P 500 (SPY)

ROKU Summary

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Recent Community Commentary

Read the most recent pitches from players about ROKU.

Recs

0
Member Avatar FVelociraptor (99.92) Submitted: 12/3/2018 6:04:40 PM : Outperform Start Price: $41.59 ROKU Score: -16.28

MUM http://velociraptor.cc

Recs

0
Member Avatar ElCid16 (92.79) Submitted: 11/14/2018 8:35:37 PM : Outperform Start Price: $47.77 ROKU Score: -25.30

Plenty of narratives exist on why Roku shouldn’t succeed: they’re competing against the big guys, they don’t produce content or can’t afford to pay for content, anyone can create hardware and compete, they don't make money on licensing etc. But at some point, you have to question the narrative, and look at the actual numbers.

New accounts on the Roku platform are growing >40% YoY. Roku is in 24MM living rooms - more than Comcast, and nearly as many as DirecTV. Where's the ceiling?

Hours streamed via Roku are growing >60% YoY. Not only are they getting more eyeballs, they are getting more eyeballs for longer.

Platform revenue, of which ? is driven by advertising, is growing >70% YoY. This is high quality, high margin revenue, which should drive company-level gross margins toward 50%.

How they’ll continue to win:

1) The ‘Free with Advertising’ Model is resonating with users
A few bucks a month with Netflix. A few more with Amazon Prime. I want Hulu. And I obviously need HBO for GoT. All these subscriptions add up. Providing an OTT service with no monthly fee is something that is bucking the trend, and users adoption confirms the desire for it. Facebook, YouTube, Instagram, Google: superior, free software, even with ads, is something consumers appreciate.

2) Trojan-horsing their way right into your living room
They obviously got started with hardware, where they focused on creating the best possible product at the lowest possible cost. But now Roku is focused on licensing their software to TV manufacturers, who have essentially given up trying to create software with superior UI. Because Roku isn't trying to monetize the software, TV mfgs are on board. 1 in 4 TVs sold in the US have Roku software pre-installed. Think of SiriusXM in the automobile, but without the monthly fee and the annoying sales calls. Of course consumers are going to use it.

3) A good product with a good UI means more time per user
TV hours streamed via Roku continue to outpace account growth (>60% and >40%, respectively, in the latest Q). Time spent bouncing from one OTT service to another means more opportunities for Roku to expand its ad inventory and continue growing ARPU. Though ARPU growth hasn’t quite kept up with streamed hours growth, Roku is likely balancing ad revenue vs. user experience, and employing a bit of thoughtfulness with their monetization strategy. Rather going all-in on monetization today, Roku is playing the long-game.

4) Roku is still small enough to play Switzerland in the OTT wars
Chromecast blocking Amazon Prime. Firestick blocking YouTubeTV. Nobody wants an OTT hub that limits, or will potentially limit your choices. Roku allows you to have everything that you want on one centralized hub - likely because they aren't competing in the content wars. Though I can't predict whether OTT services will start playing hard to get in the future, as of today everything is openly available on Roku.

In terms of valuation, my two cents is that Roku's valuation got too stretched a month or two ago. But a 5x forward revenue multiple, roughly where it's trading at now, feels much more reasonable. Great companies are never cheap.

Recs

0
Member Avatar iksnamyzs (77.87) Submitted: 11/11/2018 9:45:29 AM : Outperform Start Price: $43.25 ROKU Score: -19.56

stock hope recovers

Leaderboard

Find the members with the highest scoring picks in ROKU.

Score Leader

Ses5152f

Ses5152f (59.16) Score: +110.85

The Score Leader is the player with the highest score across all their picks in ROKU.

Top
Pick
Member Name Member
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
Index
Gain
Score Commentary
nyresearcher 21.13 9/28/2017 Outperform 5Y $18.19 +72.29% +1.98% +70.31 0 Comment
This player feels very strongly about this pick and has marked it a Top Pick. Top Picks do not affect a player’s score. SurfingFriendly 53.88 11/8/2017 Outperform 5Y $18.76 +67.10% -1.57% +68.67 0 Comment
sjterry2727 < 20 11/8/2017 Outperform 5Y $18.80 +66.71% -1.52% +68.24 0 Comment
timbng 26.31 10/30/2017 Outperform 5Y $18.72 +67.41% -0.77% +68.19 0 Comment
ETMatyahoo 29.55 10/24/2017 Outperform 5Y $19.96 +57.01% -0.49% +57.51 1 Comment
This player feels very strongly about this pick and has marked it a Top Pick. Top Picks do not affect a player’s score. clanza875 33.97 10/18/2017 Outperform NS $22.06 +42.07% -0.26% +42.33 1 Comment
PAGEBOY73 99.21 12/20/2017 3/21/2018 Underperform 3W $56.19 -44.22% -4.55% +39.68 0 Comment
This player feels very strongly about this pick and has marked it a Top Pick. Top Picks do not affect a player’s score. jjdaigle1 23.28 11/5/2018 Underperform 5Y $57.96 -45.93% -6.37% +39.56 0 Comment
BornToBeBullish 57.04 10/16/2017 Outperform 5Y $22.97 +36.44% -0.05% +36.49 0 Comment
afrespect 44.74 10/16/2017 Outperform 5Y $22.97 +36.44% -0.05% +36.49 0 Comment

Wall Street

See what the Wall Street professionals think, according to their public statements and filings.

Player Name Player
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
S&P
Gain
Score End Date Commentary
TrackWedbush 87.28 11/1/2018 Outperform NS $57.00 -45.02% -6.08% -38.94 0 Comment
TrackRBCCapMkts 84.86 10/19/2018 Outperform NS $59.34 -47.19% -7.96% -39.23 0 Comment

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