Should you buy Roku stock? (August 2023)
- 7 months ago
Roku stock analysis.
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Roku reported earnings last week and the stock soared by over 30%. Shares are now up 124% year to date. At the latest share price, the company has a market cap of 12.9 billion dollars. It’s got 1.8 billion of cash and no debt, so the enterprise value is 11.1 billion.
The latest earnings report revealed a 16% increase in active accounts to 74 million and an 11% increase in total revenue. That takes revenue up to 3.2 billion over the last 12 months roughly 7% more than this time last year.
However, Roku’s bottom line is still in the red. Net income over the last 12 months is negative 661 million and free cash flow is negative 166 million. Stock based compensation at 389 million is roughly 12% of revenue.
Roku’s business model can be organized into two parts. The platform segment generates revenue from the sale of digital advertising and content distribution. This segment generated 87% of revenue with a gross margin of 54%.
The device segment includes the sale of streaming players and Roku-branded TVs as well as some other smart products. This segment contributes the remaining 13% of revenue with negative gross margins of -17%.
So this segment is what’s known as a loss leader. By selling its devices at a loss, Roku can grow its user base and then monetise those users with advertising.
#rokustock #investing #stocks #overlookedalpha
Join 9000+ investors: https://www.overlookedalpha.com
Roku reported earnings last week and the stock soared by over 30%. Shares are now up 124% year to date. At the latest share price, the company has a market cap of 12.9 billion dollars. It’s got 1.8 billion of cash and no debt, so the enterprise value is 11.1 billion.
The latest earnings report revealed a 16% increase in active accounts to 74 million and an 11% increase in total revenue. That takes revenue up to 3.2 billion over the last 12 months roughly 7% more than this time last year.
However, Roku’s bottom line is still in the red. Net income over the last 12 months is negative 661 million and free cash flow is negative 166 million. Stock based compensation at 389 million is roughly 12% of revenue.
Roku’s business model can be organized into two parts. The platform segment generates revenue from the sale of digital advertising and content distribution. This segment generated 87% of revenue with a gross margin of 54%.
The device segment includes the sale of streaming players and Roku-branded TVs as well as some other smart products. This segment contributes the remaining 13% of revenue with negative gross margins of -17%.
So this segment is what’s known as a loss leader. By selling its devices at a loss, Roku can grow its user base and then monetise those users with advertising.
#rokustock #investing #stocks #overlookedalpha