Roku has been flying high recently on strong sales and even stronger revenue from ads and subscriptions.
Now that is paying off as Wall Street analysts, Oppenheimer & Company, upgraded Roku Stock. Now Oppenheimer & Company says Roku is outperforming the market. This all comes after Oppenheimer had upgraded Roku’s stock in March.
Why is Roku’s stock being upgraded? Oppenheimer is citing a significant potential for improvement.
Since March Roku stock has jumped from $34 to $43 on July 3, a 26% return.
In the first quarter of 2018, Roku generated $61.5 million in hardware sales and earned $75.1 million with their advertising and licensing fees. Roku also reported that half of all Roku’s new users now come from Roku TVs. In total Roku had $136.6 million in revenue beating the expected $128 million.
Roku also saw a jump in their active accounts with over 20.8 million active accounts. (Note: that is accounts, not devices. One account can represent multiple devices.)
Roku said in a statement on their site:
Roku delivered another strong quarter of operational and financial performance in Q1 2018. The secular shift from legacy TV distribution to streaming continues unabated. Our purpose-built TV operating system and advertising platform continue to lead the market. Moreover, our advertising and content partners are benefiting from our increasing scale. Nearly half of our roughly 21 million active users have cut the cord or have never had a traditional pay TV subscription, which means that they simply cannot be reached through linear TV. This makes our strategic position in the living room extremely valuable. In the first quarter, our platform segment revenue more than doubled, as active accounts grew 47% year-over-year and ARPU increased 50%. With strong business momentum and favorable industry trends, we are raising our full year 2018 outlook.
Put this all together and Roku’s future is looking very bright.
Source: The Motley Fool
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