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Roku Shares Continue to Rise Following Positive Analyst Outlook
Roku’s stock has gained momentum, rising over 3% on Friday, which contributes to a total increase of 13% over the past week. This uptick follows Guggenheim Securities’ decision to maintain a buy rating on the stock, expressing strong confidence in the company’s potential for growth in user engagement and financial performance heading into 2025.
Analyst Michael Morris noted that Roku’s strategy to enhance monetization metrics, foster partnerships with third parties, and expand revenue-driven offerings is significant. He emphasized that this focus is expected to bolster the company’s overall valuation. “We believe these actions are pivotal in creating a more valuable enterprise,” Morris stated.
In a notable development, Trump Media and Technology Group announced the launch of its Truth+ streaming app on Roku TVs. This move is part of TMTG’s broader plan to expand its reach by also introducing the platform on Samsung and LG smart TVs in the near future.
Meanwhile, recent insider trading activities revealed that Roku’s Chief Financial Officer, Dan Jedda, sold 1,000 restricted stock units valued at approximately $75,000. Additionally, a revocable trust established by Roku’s Chairman and CEO, Anthony Wood, sold 4,600 RSUs valued at around $331,844.
As Roku continues to evolve, the company has announced it will cease to report key metrics such as active accounts and average revenue per user starting next quarter. This shift is aimed at prioritizing growth in platform revenue and increased profitability.
For the upcoming quarter, Roku projects a year-over-year net revenue growth of 14%, aiming for $1.01 billion, with platform revenue expected to rise by 16%. However, device revenue is predicted to stagnate due to high inventory levels attributed to disappointing holiday sales in the previous quarter. The company anticipates a gross profit of $450 million, alongside a net loss of $40 million, and an adjusted EBITDA of $55 million.
Looking forward to the complete fiscal year of 2025, Roku’s projections include $4.61 billion in net revenue and a gross profit of $2.01 billion. The expected adjusted EBITDA for the year stands at $350 million, with platform revenue growth anticipated at 12% to $3.95 billion and device revenue also expected to rise by 12% to $660 million. Management has conveyed optimism about achieving positive operating income by the end of 2026.
Throughout 2023, Roku’s stock performance has shown mixed results, with shares up 2.9% year-to-date and 3.8% over the past six months. However, the company’s shares have decreased by 13.7% in the past month alone.
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