It looks like Sixth time’s the charm for CEO Anthony Wood judging by the stellar run Roku Inc. has had since going public in September 2017. The stock is up over 400% since inception with more potential upside to come as Disney+ announced Roku would be one of its partners.
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Fundamentals
The recent third-quarter earnings released on Wednesday 6th of November 2019 showed results beating analysts’ estimates on all accounts. Revenue increased year over year with active user accounts rising by 36%, and revenue generated from these accounts also rose to $22.58.
Yet the stock sold off over 16% after the earnings release as the Q4 revenue guidance saw anxiety for investors as they perceive the share to be overvalued. "Good enough" isn't always good enough on Wall Street were some of the headlines doing the rounds.
The share did regain its losses from the latest downturn and might start to push back to the highs we have seen in September.
Roku Inc. share overview:
- Sector: Communication Services
- Market Cap of $14.17 Billion
- Dividend Yield: N/A
- Shares in issue: 116,234,076
- 52 Week Range low of $26.30 and $176.55 per share high.
Outlook
It might be the opportune moment to take out your Visa and swipe for a new Roku device as the “StreamWars” is set to kick off with the Disney+ debut. Some analysts see the future growth of the company as quite optimistic and overvalued with its price to book (PB) ratio at 34.27.
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on EasyEquities
Chart Life
The price action on Roku is still trading in an uptrend, and the price action is currently filling a triangle technical price pattern. The recent downturn after earnings needs to close above the $150.00 per share resistance level to negate a move lower.
Source - Bloomberg
Portfolio particulars
- Portfolio Hold (Current)*
- Portfolio Buy opportunity: close above $145.00 per share**
- WhatsTheBeef long term target price: $180.00 per share.
Know your company: Roku Inc. (Roku)
- Roku, the Japanese word 六 (Roku) meaning "six" was named so because it was the sixth company that Anthony Wood (founder and CEO since 2002) started.
- The company manufactures online media players who can connect to a home network to stream digital media such as music, photos or digital video.
- Over 9% of U.S households own a device, and more than 38 million users are streaming content on ROKU per week.
Source - Wikipedia, SeekingAlpha, Zacks Investment Research, Yahoo
*Portfolio Hold (Current) refers to investors who already hold the stock within their portfolio.
**Portfolio Buy opportunity refers to Technical level crossed which might imply that the markets behavior would support the outlook and Close above refers to a share price close above a Technical Resistance level.
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Barry is a market analyst with GT247.com, with a wealth of experience in the investment markets. Now in his tenth year in the markets, Barry "The Beef" Dumas brings a combination of technical analysis and fundamental insights to the table.
