Roku's Q4 Earnings Report Preview
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy ROKU?
Source: Fool
- Earnings Expectations: Roku anticipates a record $1.35 billion in revenue for Q4, representing a 12.4% year-over-year increase, although this would mark the weakest growth since spring 2023, yet achieving this would extend its streak of double-digit growth to ten quarters.
- Profitability Improvement: The projected net income of $40 million translates to a modest 3% net margin, but it would be Roku's highest quarterly earnings since summer 2021, indicating a recovery from previous years of losses and setting the stage for sustained profitability.
- Ad Revenue Growth: Roku's partnership with Amazon has accelerated its video advertising business growth, which outpaced the overall U.S. digital ad market, although Roku does not disclose ad revenue separately, investors are keen to see strong growth in this area.
- Hardware Sales Challenges: Typically, Roku's hardware sales spike during the holiday season, which could negatively impact overall margins; while last year's Q4 saw a significant earnings beat aided by political ads, this year presents tougher comparisons, necessitating careful management of device sales fluctuations.
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Analyst Views on ROKU
Wall Street analysts forecast ROKU stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ROKU is 123.10 USD with a low forecast of 100.00 USD and a high forecast of 145.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
23 Analyst Rating
19 Buy
4 Hold
0 Sell
Strong Buy
Current: 88.520
Low
100.00
Averages
123.10
High
145.00
Current: 88.520
Low
100.00
Averages
123.10
High
145.00
About ROKU
Roku, Inc. operates a television (TV) streaming platform. The Company connects viewers to the streaming content they love, enables content publishers to build and monetize large audiences, and provides advertisers with capabilities to engage consumers. The Company’s segments include platform and devices. The platform segment is engaged in the sale of digital advertising (including direct and programmatic video advertising, media and entertainment promotional spending, and related services) and streaming services distribution (including subscription and transaction revenue shares, the sale of premium subscriptions, and the sale of branded app buttons on remote controls). The devices segment is engaged in the sale of streaming players, Roku-branded TVs, smart home products and services, audio products, and related accessories. The Company sells the majority of its devices in the United States through retailers and distributors as well as through the Company’s website.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Roku's Q4 Earnings Report Preview
- Earnings Expectations: Roku anticipates a record $1.35 billion in revenue for Q4, representing a 12.4% year-over-year increase, although this would mark the weakest growth since spring 2023, yet achieving this would extend its streak of double-digit growth to ten quarters.
- Profitability Improvement: The projected net income of $40 million translates to a modest 3% net margin, but it would be Roku's highest quarterly earnings since summer 2021, indicating a recovery from previous years of losses and setting the stage for sustained profitability.
- Ad Revenue Growth: Roku's partnership with Amazon has accelerated its video advertising business growth, which outpaced the overall U.S. digital ad market, although Roku does not disclose ad revenue separately, investors are keen to see strong growth in this area.
- Hardware Sales Challenges: Typically, Roku's hardware sales spike during the holiday season, which could negatively impact overall margins; while last year's Q4 saw a significant earnings beat aided by political ads, this year presents tougher comparisons, necessitating careful management of device sales fluctuations.
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Wall Street Analysts Adjust Ratings on Key Stocks
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- Market Dynamics: While specific stock names are not mentioned, changes in analyst ratings typically influence investor decisions and can lead to price volatility in the affected stocks.
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Roku's Q4 Earnings Report Preview
- Earnings Expectations: Roku anticipates a record $1.35 billion in revenue for Q4, representing a 12.4% year-over-year increase, although this would mark the weakest growth since spring 2023, yet achieving this would extend its streak of double-digit growth to ten quarters.
- Profitability Improvement: The projected net income of $40 million translates to a modest 3% net margin, but it would be Roku's highest quarterly earnings since summer 2021, indicating a recovery from previous years of losses and setting the stage for sustained profitability.
- Ad Revenue Growth: Roku's partnership with Amazon has accelerated its video advertising business growth, which outpaced the overall U.S. digital ad market, although Roku does not disclose ad revenue separately, investors are keen to see strong growth in this area.
- Hardware Sales Challenges: Typically, Roku's hardware sales spike during the holiday season, which could negatively impact overall margins; while last year's Q4 saw a significant earnings beat aided by political ads, this year presents tougher comparisons, necessitating careful management of device sales fluctuations.
See More
Wall Street Analysts Adjust Ratings
- Analyst Rating Updates: Top Wall Street analysts have adjusted their ratings on several companies, including upgrades, downgrades, and initiations, reflecting varying market perspectives on these firms.
- Market Dynamics Observation: While specific company names were not mentioned, changes in analyst ratings typically influence investor decisions, potentially leading to price fluctuations in the related stocks.
- Investor Focus: For those considering buying WLK stock, analysts' opinions will serve as a crucial reference, aiding in the assessment of potential investment risks and returns.
- Information Source: This information is provided by Benzinga, highlighting the significance of analyst ratings in investment decisions, despite the lack of specific rating details.
See More
High-Volume Earnings Reports This Week from Tech and Consumer Sectors
- Earnings Schedule: This week features a high volume of earnings reports from technology, consumer discretionary, and energy sectors, with RIVN stock showing notable movement ahead of its earnings release, indicating investor sentiment.
- Monday.com and Pagaya Reports: On Monday, work management SaaS provider Monday.com and fintech company Pagaya released their earnings before the market opened, with expectations that their results will reflect broader industry trends.
- Coinbase Earnings Expectations: On Thursday, Coinbase is expected to report earnings of 68 cents per share and quarterly revenue of $1.86 billion, despite facing a projected 33% drop in transaction revenue, raising investor interest in its growing stablecoin and subscription services.
- Nebius Group Forecast: Also on Thursday, Nebius Group is projected to report a loss of $1.14 per share and revenue of $246.05 million, with analysts expressing caution, reflecting concerns over cloud service demand in the current market environment.
See More
Wall Street Analysts Adjust Ratings
- Analyst Rating Changes: Top Wall Street analysts have adjusted their ratings on several companies, including upgrades, downgrades, and initiations, reflecting varying market perspectives and future expectations for these firms.
- Market Reaction Insight: While specific company names are not disclosed, changes in analyst ratings typically influence investor decisions, potentially leading to price volatility in the affected stocks.
- Investor Focus: Investors considering buying RBLX stock should pay attention to analysts' opinions, as these insights may impact market sentiment and stock performance.
- Rating Change Transparency: Benzinga provides a comprehensive view of analyst rating changes, assisting investors in obtaining complete information to make more informed investment decisions.
See More
Wall Street Analysts Adjust Ratings on Key Stocks
- Analyst Rating Changes: Top Wall Street analysts have adjusted their ratings on several stocks, including upgrades, downgrades, and initiations, reflecting varying market perspectives on these companies.
- Market Dynamics: While specific stock names are not mentioned, changes in analyst ratings typically influence investor decisions and can lead to price volatility in the affected stocks.
- Investor Focus: For investors considering buying Nokia (NOK) stock, analysts' opinions will serve as a crucial reference point, potentially impacting their investment strategies.
- Source of Information: This information is provided by Benzinga, highlighting the significance of analyst ratings in investment decisions, despite the lack of specific rating details.
See More
Movers: Hims & Hers, Novo Nordisk, Micron, Kroger, STMicroelectronics, Nvidia, and Others
- Stock Market Trends: Stock futures were declining on Monday as investors expressed concerns about the sustainability of a recent relief rally.
- Investor Sentiment: There is a prevailing uncertainty among investors regarding the market's ability to maintain upward momentum following last week's gains.
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