{"id":554333,"date":"2023-02-20T22:11:02","date_gmt":"2023-02-20T19:11:02","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/why-wall-street-has-vastly-diverging-views-about-roku\/"},"modified":"2023-02-20T22:11:02","modified_gmt":"2023-02-20T19:11:02","slug":"why-wall-street-has-vastly-diverging-views-about-roku","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/why-wall-street-has-vastly-diverging-views-about-roku\/","title":{"rendered":"#Why Wall Street Has Vastly Diverging Views About Roku"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a25b2066b1b7\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a25b2066b1b7\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/why-wall-street-has-vastly-diverging-views-about-roku\/#Why_Wall_Street_Has_Vastly_Diverging_Views_About_Roku\" >Why Wall Street Has Vastly Diverging Views About Roku<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"Why_Wall_Street_Has_Vastly_Diverging_Views_About_Roku\"><\/span>Why Wall Street Has Vastly Diverging Views About Roku<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    Despite ballooning operating losses (nearly $250 million) and an advertising downturn, Roku\u2019s stock soared a day after it reported fourth-quarter earnings on Feb. 15. Part of this came as the number of active users picked up to 70 million and the Anthony Wood-led firm beat revenue expectations for the quarter. Roku also promised to tighten its expenses moving forward, with a plan to reach\u00a0positive adjusted earnings\u00a0before interest, taxes, depreciation, and amortization in 2024.<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    But, longer term, Wall Street\u2019s view on the stock remains mixed, depending on how much belief there is that Roku can maintain its place as a key gatekeeper in the streaming landscape with its <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a> player. (Roku\u2019s stock sat at $71.59 as of market close on Feb. 17.)<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    A team of analysts at investment bank Evercore (which has an $80 price target for the firm) note that Roku has an outsized exposure to the scatter ad market (ad\u00a0slots held back during up front sales) which has been increasingly pressured over the past few months. Roku, the analysts note, has not been able to benefit from political or sports ad spending, which has helped other ad-based businesses through the downturn. They see a business model that isn\u2019t broken per se, but rather one that has been contending with some rather large headwinds. And one that could improve once those headwinds die down.\u00a0<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    Roku gave weaker than expected guidance for the next quarter, but many analysts believe the company is being conservative, with Wells Fargo analyst Steven Cahall writing, somewhat optimistically, that \u201cThe ad market in Q1 sounds like it\u2019s neither getting worse nor better.\u201d (Cahall has a $67 price target on Roku.) A Guggenheim research team led by Michael Morris regarded Roku\u2019s account base as \u201cvaluable\u201d but noted that \u201cwe struggle to value the business given the inconsistency of results relative to guidance and the cautionary macro-economic tone cited by management.\u201d<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    The positives for Roku going forward include the company\u2019s plan to moderate expense growth (a plan that only those bullish on the stock believe in), the fact that Roku Channel is seeing increasing engagement, with streaming hours up more than 85 percent from the prior year and its shoppable advertising partnership with Walmart. Also a plus is the company\u2019s hiring of three new executives this past fall, including former CEO of Fox Entertainment,\u00a0Charlie Collier,\u00a0who is now leading Roku\u2019s advertising and content business, including Roku Originals, and is known for doing less with more.\u00a0\u201cWe believe Roku can leverage its advantages in pricing and merchandising to remain the market leader in consumer-facing connected television solutions,\u201d wrote a team of analysts at investment bank Oppenheimer, which is bullish on the firm with an $85 price target. <\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    Similarly, Macquarie\u2019s Tim Nollen, who has a $70.10 price target on Roku, wrote: \u201cWe\u2019re optimistic that the downturn seen throughout \u201922 will end in Q1\u201923, and that Roku\u2019s large and growing installed user base and improvements to its ad tech and partnerships can lead to recovery this year.\u201d<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    But taking a decidedly downbeat view on the stock, MoffettNathanson analysts (who have a $38 price target) see Roku being negatively impacted by the larger pressures facing steaming companies. The stock had been artificially propped up by the streaming wars, these experts argue, which led all the major media companies to spend on content and marketing in pursuit of subscriber numbers. This ultimately benefited Roku\u2019s platform and advertising business. But now, the tides have turned as companies such as Disney, Warner Bros. Discovery and AMC Networks look to cut spending.\u00a0<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    \u201cWe are not luddites, yes, we see the future as streaming. Yes, we see the continuing (frightening) pressures facing the linear model. However, the current reality is that Roku\u2019s biggest customers are now gr<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ling with the economics of these pressures and are starting to pause the rapid escalation in streaming spending,\u201d the MoffettNathanson analysts wrote.<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    Roku\u2019s latest revenue push takes it away from those pressures, as the company\u00a0unveiled plans in January to manufacture its own branded TV sets. However, MoffettNathanson analysts see the plan to manufacture, rather than continuing to partner with outside companies, as weighing on the profit margins. Pivotal Research Group\u2019s Jeffrey Wlodarczak (who has a $55 price target) also expressed \u201cserious reservations\u201d about the company\u2019s move into home devices, adding: \u201cThe bottom line is that the outlook remains choppy for Roku going forward.\u201d<\/p>\n<\/p><\/div>\n<p><script type=\"text\/plain\" class=\"optanon-category-C0004\">\n!function(f, b, e, v, n, t, s) {\nif (f.fbq) return;\nn = f.fbq = function() {n.callMethod ? n.callMethod.apply(n, arguments) : n.queue.push(arguments);};\nif (!f._fbq) f._fbq = n;\nn.push = n;\nn.loaded = !0;\nn.version = '2.0';\nn.queue = [];\nt = b.createElement(e);\nt.async = !0;\nt.src = v;\ns = b.getElementsByTagName(e)[0];\ns.parentNode.insertBefore(t, s);\n}(window, document, 'script', 'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\nfbq('init', '352999048212581');\nfbq('track', 'PageView');\n<\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more Like this articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/social-media\/\" target=\"_blank\" rel=\"noopener\">Social Media category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/www.hollywoodreporter.com\/business\/business-news\/roku-stock-price-target-wall-street-1235330299\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Why Wall Street Has Vastly Diverging Views About Roku Despite ballooning operating losses (nearly $250 million) and an advertising downturn, Roku\u2019s stock soared a day after it reported fourth-quarter earnings on Feb. 15. Part of this came as the number of active users picked up to 70 million and the Anthony Wood-led firm beat revenue&#8230;<\/p>\n","protected":false},"author":1,"featured_media":554334,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/www.hollywoodreporter.com\/wp-content\/uploads\/2023\/02\/Screen-Shot-2023-02-20-at-10.55.56-AM.jpg?w=1024","fifu_image_alt":"","footnotes":""},"categories":[17],"tags":[21252],"class_list":["post-554333","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-social-mediaa","tag-roku"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/554333","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=554333"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/554333\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/554334"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=554333"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=554333"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=554333"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}