Roku Inc.(ROKU:NSD) Analysts update ratings and targets on earnings release

STA Research
by: STA Research

Roku’s first quarter of 2022 showed indications of stalling, with total net revenue and subscriber growth both falling short of analyst expectations. Due to several problems, there was also a considerable drop in streaming unit player sales.

Roku’s subscriber total was 61.3 million in Q1 despite only adding 1.1 million new active accounts. This was little fewer than the 61.8 million expected by analysts. Roku has 60 million accounts by the end of 2021, up 3.7 million from the previous quarter.

The company’s total net revenue growth slowed to 28 percent in the first quarter, reaching $737.7 million. The company’s revenue increased by 79 percent in the first quarter of 2021. The company is currently forecasting  total net income to increase in the second quarter.

Analysts respond to Earnings on Roku:

 

Based on the Roku Inc stock forecasts from 24 analysts, the average analyst target price for Roku Inc is USD 168.37 over the next 12 months. Roku Inc’s average analyst rating is Buy . Stock Target Advisor’s own stock analysis of Roku Inc is Slightly Bullish , which is based on 9 positive signals and 5 negative signals. At the last closing, Roku Inc’s stock price was USD 91.63Roku Inc’s stock price has changed by -7.96% over the past week, -28.61% over the past month and -74.39% over the last year.

What we like:

Superior risk adjusted returns

This stock has performed well, on a risk adjusted basis, compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile.

Superior capital utilization

The company management has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior return on assets

The company management has delivered better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile.

Low debt

The company is less leveraged than its peers ,, and is among the top quartile, which makes it more flexible. However, do check the news and look at its sector. Sometimes this is low because the company is not growing and has no growth potential.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Superior Earnings Growth

This stock has shown top quartile earnings growth in the previous 5 years compared to its sector.

Superior Revenue Growth

This stock has shown top quartile revenue growth in the previous 5 years compared to its sector.

High Gross Profit to Asset Ratio

This stock is in the top quartile compared to its peers on Gross Profit to Asset Ratio. This is a popular measure among value investors for showing superior returns in the long run.

What we don’t like:

High volatility

The total returns for this company are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Overpriced compared to earnings

The stock is trading high compared to its peers on a price to earning basis and is above the sector median.

Overpriced compared to book value

The stock is trading high compared to its peers median on a price to book value basis.

Overpriced on cashflow basis

The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Overpriced on free cash flow basis

The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

 

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