Latest news with #ROKU
Yahoo
19-05-2025
- Business
- Yahoo
1 Growth Stock for Long-Term Investors and 2 to Ignore
Growth is a hallmark of all great companies, but the laws of gravity eventually take hold. Those who rode the COVID boom and ensuing tech selloff in 2022 will surely remember that the market's punishment can be swift and severe when trajectories fall. Luckily for you, our job at StockStory is to help you avoid short-term fads by pointing you toward high-quality businesses that can generate sustainable long-term growth. Keeping that in mind, here is one growth stock expanding its competitive advantage and two that could be down big. One-Year Revenue Growth: +18.5% Started in 1999 by David Morken who was later joined by Henry Kaestner as co-founder in 2001, Bandwidth (NASDAQ:BAND) provides thousands of customers with a software platform that uses its own global network to provide phone numbers, voice, and text connectivity. Why Are We Out on BAND? Revenue increased by 13.9% annually over the last three years, acceptable on an absolute basis but tepid for a software company enjoying secular tailwinds Estimated sales growth of 2.8% for the next 12 months implies demand will slow from its three-year trend Gross margin of 38% reflects its high servicing costs Bandwidth is trading at $14.10 per share, or 0.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than BAND. One-Year Revenue Growth: +17.3% Spun out from Netflix, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services. Why Are We Hesitant About ROKU? Preference for prioritizing user growth over monetization has led to 1.4% annual drops in its average revenue per user Costs have risen faster than its revenue over the last few years, causing its EBITDA margin to decline by 7.1 percentage points Performance over the past three years shows its incremental sales were much less profitable, as its earnings per share fell by 34.6% annually At $70.04 per share, Roku trades at 28.6x forward EV/EBITDA. Read our free research report to see why you should think twice about including ROKU in your portfolio, it's free. One-Year Revenue Growth: +88.8% Founded during the dot-com era in 1999 and specializing in high-intent consumer traffic, QuinStreet (NASDAQ:QNST) operates digital performance marketplaces that connect clients in financial and home services with consumers actively searching for their products. Why Is QNST a Good Business? Impressive 31.4% annual revenue growth over the last two years indicates it's winning market share this cycle Estimated revenue growth of 9.5% for the next 12 months implies its momentum over the last two years will continue Earnings growth has trumped its peers over the last two years as its EPS has compounded at 106% annually QuinStreet's stock price of $15.05 implies a valuation ratio of 14x forward P/E. Is now the time to initiate a position? Find out in our full research report, it's free. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16-05-2025
- Business
- Yahoo
ROKU Q1 Earnings Call: Advertising Demand Shifts and Subscription Growth Shape Outlook
Streaming TV platform Roku (NASDAQ: ROKU) announced better-than-expected revenue in Q1 CY2025, with sales up 15.8% year on year to $1.02 billion. The company expects next quarter's revenue to be around $1.07 billion, close to analysts' estimates. Its non-GAAP loss of $0.19 per share was 24.8% above analysts' consensus estimates. Is now the time to buy ROKU? Find out in our full research report (it's free). Revenue: $1.02 billion vs analyst estimates of $1.01 billion (15.8% year-on-year growth, 1.5% beat) Adjusted EPS: -$0.19 vs analyst estimates of -$0.25 (24.8% beat) Adjusted EBITDA: $56.02 million vs analyst estimates of $60.43 million (5.5% margin, 7.3% miss) Revenue Guidance for Q2 CY2025 is $1.07 billion at the midpoint, roughly in line with what analysts were expecting EBITDA guidance for the full year is $350 million at the midpoint, above analyst estimates of $337.7 million Operating Margin: -5.7%, up from -8.2% in the same quarter last year Free Cash Flow Margin: 13.4%, up from 6.4% in the previous quarter Total Hours Streamed: 35.8 billion, up 5 billion year on year Market Capitalization: $10.28 billion Roku's first quarter results were shaped by shifting advertising demand and continued growth in its subscription offerings. Management highlighted that the ongoing migration of ad budgets from traditional TV to streaming, combined with increased adoption of programmatic advertising, were central to recent performance. CEO Anthony Wood emphasized, 'Advertisers have already been shifting their budgets from linear to streaming and from direct insertion orders to programmatic. Those are two big trends that are positive for Roku.' Looking ahead, the company's guidance is built on expectations that these advertising trends will persist and that new initiatives, including the recent acquisition of Frndly, will accelerate subscription growth. CFO Dan Jedda noted that Roku's outlook incorporates some macroeconomic caution, but the company is confident in its diversified revenue streams and expects platform revenue and adjusted EBITDA to benefit from both secular industry changes and specific product initiatives over the rest of the year. Management identified several business drivers and operational changes influencing first quarter results and the outlook for the rest of the year. Advertising market evolution: Roku's ad business benefited from the industry's shift toward programmatic buying, allowing advertisers increased flexibility and real-time campaign adjustments. Management stated that this trend, accelerated by macro uncertainty, played to Roku's strengths, with Charlie Collier, President of Roku Media, describing programmatic as 'gaining share, because… it offers the flexibility and performance that advertisers need.' Subscription momentum: Roku's subscription business continued to expand, highlighted by the acquisition of Frndly, a 'skinny bundle' service. Management explained this acquisition as both a growth driver for subscriptions and as immediately beneficial to adjusted EBITDA margins in its first full year. Platform diversification: The company's multi-year strategy to diversify its revenue base—across advertising formats, subscription products, and home screen engagement—has reduced reliance on any single segment. This diversification was cited as enabling better navigation of market volatility. Home Screen and Roku Channel engagement: The Roku Channel became the number two app on the platform by engagement, growing 84% globally year-on-year. Management attributed this to enhanced Home Screen features and targeted UI improvements, which have also increased subscription signups and advertiser interest beyond traditional media & entertainment verticals. Tariff and supply chain management: Management addressed concerns over potential tariffs on devices, emphasizing a diversified manufacturing base and the ability to shift production as needed. Mustafa Ozgen, President of Devices, noted that the current tariff structure is not expected to materially affect gross profit for the year, and existing flexibility would help navigate any changes. Roku's management expects future performance to be driven by continued growth in programmatic advertising, expansion of its subscription base, and disciplined cost management against a backdrop of macroeconomic uncertainty. Programmatic advertising gains: Management believes that advertisers' increased focus on flexibility and return on investment will sustain the shift toward programmatic ad buying. The company has invested in partnerships with demand-side platforms (DSPs) and expects this to be a long-term growth driver. Subscription and content expansion: The acquisition of Frndly and further Home Screen improvements are expected to drive growth in subscriptions, with management stating that these initiatives should be accretive to adjusted EBITDA margins in the first full year. Manufacturing agility and cost controls: With device tariffs and supply chain risks in mind, management highlighted its diversified production network and pricing strategies as tools to mitigate potential headwinds, aiming to maintain or improve profitability even if market conditions change. Cory Carpenter (JPMorgan): Asked what gives management confidence in reiterating full-year platform and EBITDA guidance amid macro uncertainty; executives cited secular ad trends, diversification, and new initiatives as buffers, with Charlie Collier noting, 'programmatic advertising is gaining share.' Brent Navon (Bank of America): Inquired about the ability of new business initiatives to offset macroeconomic weakness; Dan Jedda responded that ongoing and yet-to-be-announced initiatives in subscriptions and advertising offer some insulation, though not total immunity to broader downturns. Vasily Karasyov (Cannonball Research): Sought clarity on whether programmatic revenue is incremental or cannibalizing prior direct sales; management explained that while some is incremental, much is a reallocation of existing spend, but new partnerships and SMB adoption are net new. Laura Martin (Needham): Challenged the rationale for acquiring Frndly and asked about monetizing Roku's first-party data; executives emphasized the popularity of linear streaming and indicated that while direct data sales aren't planned, data enhances ad performance and is central to platform differentiation. Matt Thornton (FBN Securities): Asked about the inclusion of Frndly in guidance and the impact of tariffs on devices; management confirmed Frndly is included in full-year outlook and said their multi-country manufacturing strategy minimizes tariff risks and supports flexibility. In the quarters ahead, the StockStory team will closely monitor (1) the pace of programmatic ad adoption and its impact on overall advertising revenue, (2) the success of integrating and expanding subscription offerings, especially following the Frndly acquisition, and (3) management's ability to maintain profitability through supply chain shifts and tariff management. Additional attention will be paid to new Home Screen features and their effectiveness in driving user engagement and monetization. Roku currently trades at a forward EV/EBITDA ratio of 28.1×. In the wake of earnings, is it a buy or sell? See for yourself in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
Jim Cramer Says Roku Stock 'Has Some Upside'
When a caller asked Cramer about Roku, Inc. (NASDAQ:ROKU), he commented: 'Alright. You know, there's been a bunch of people who don't like Roku. I'm not going to join that gaggle. I think the stock has some upside because they are doing some pretty terrific things in streaming, so I'm okay with it.' A large movie theatre filled with people enjoying a film streaming on a smart TV. Roku (NASDAQ:ROKU) runs a streaming platform that provides access to a broad selection of content. The company provides advertising and subscription services, sells streaming devices, Roku-branded TVs, smart home items, and audio products. It also enters licensing deals with service providers. JDP Capital Management stated the following regarding Roku, Inc. (NASDAQ:ROKU) in its Q4 2024 investor letter: "Roku, Inc. (NASDAQ:ROKU) was down 15% in 2024 closing at $77.38 per share, about 20% above our cost basis. The company has an enterprise value of about $9 billion, no debt, and trades for a little over 2x estimated 2025 platform revenue (hardware revenue excluded).12 Roku has been undervalued and under-owned for so long that a positive re-rating of the stock to an acquisition value would justify a multi-bagger return… While we acknowledge the potential of ROKU to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ROKU and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: Jim Cramer Commented on These 6 Natural Gas Players and 13 Stocks on Jim Cramer's Radar Recently Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
Jim Cramer Says Roku Stock 'Has Some Upside'
When a caller asked Cramer about Roku, Inc. (NASDAQ:ROKU), he commented: 'Alright. You know, there's been a bunch of people who don't like Roku. I'm not going to join that gaggle. I think the stock has some upside because they are doing some pretty terrific things in streaming, so I'm okay with it.' A large movie theatre filled with people enjoying a film streaming on a smart TV. Roku (NASDAQ:ROKU) runs a streaming platform that provides access to a broad selection of content. The company provides advertising and subscription services, sells streaming devices, Roku-branded TVs, smart home items, and audio products. It also enters licensing deals with service providers. JDP Capital Management stated the following regarding Roku, Inc. (NASDAQ:ROKU) in its Q4 2024 investor letter: "Roku, Inc. (NASDAQ:ROKU) was down 15% in 2024 closing at $77.38 per share, about 20% above our cost basis. The company has an enterprise value of about $9 billion, no debt, and trades for a little over 2x estimated 2025 platform revenue (hardware revenue excluded).12 Roku has been undervalued and under-owned for so long that a positive re-rating of the stock to an acquisition value would justify a multi-bagger return… While we acknowledge the potential of ROKU to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ROKU and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: Jim Cramer Commented on These 6 Natural Gas Players and 13 Stocks on Jim Cramer's Radar Recently Disclosure: None. Sign in to access your portfolio
Yahoo
13-05-2025
- Business
- Yahoo
Roku, Inc. (ROKU): Among Advertising & Media Stocks That Could Tank If Recession Hits
We recently published a list of . In this article, we are going to take a look at where Roku, Inc. (NASDAQ:ROKU) stands against other advertising & media stocks that could tank if recession hits. When recession strikes, the advertising and media sectors are the first ones to see a noticeable impact. Companies tend to reduce their advertising budgets when the going gets tough. As a result, media companies that rely heavily on advertising spending fail to hit their revenue targets. So, if investors want to look at red flags for recession, advertising and media stocks offer good insights. While media companies across the board feel the heat of reduced advertising budgets, some companies tend to fare better. These are mostly the ones that have diversified their income streams to reduce reliance on advertising. In this post, we look at stocks that are likely to struggle if ad spending goes down. To come up with our list of top 10 advertising and media stocks that could tank if recession hits, we only looked at stocks that had a market cap of at least $5 billion. A large movie theatre filled with people enjoying a film streaming on a smart TV. Roku, Inc. is a TV streaming platform operator. It operates in the Devices and Platform segments. The company's streaming platform enables users to access and find news, TV shows, sports, movies, and similar content. It offers streaming services distribution, digital advertising, sale of streaming players, audio products, and other products and services. Last month, the firm was upgraded by Bank of America (BofA) with a Buy rating and a price target of $100. The upgrade was based on the company's strong user base and its growth potential. Brent Navon, BofA Securities analyst, highlighted the company's profitability trajectory by saying: We believe Roku provides an attractive combination of top-line growth, margin expansion, and scaling free cash flow generation The company's streaming market share has been growing steadily, and with it, the advertising revenue as well. Like a handful of other streaming stocks, ROKU's bull thesis also relies on its advertising revenue, and once investors start seeing that slow down, the stock could fall even further. Overall, ROKU ranks 1st on our list of advertising & media stocks that could tank if recession hits. While we acknowledge the potential of ROKU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ROKU but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
