Roku, Inc. (NASDAQ: ROKU) is a leading manufacturer of streaming equipment in the US. The company is a pioneer in US TV streaming. It also operates the Roku streaming TV network, which has 70 million viewers. Roku, Inc. also manufactures smart home products and runs an ad-based streaming channel. The company is renowned for its ease of streaming. Customers only need a Roku box, stick, or TV to start streaming.
Stock Performance
On November 27, 2023, Roku stock rose 8.48% at the close of trading and is valued at $102.98 per share. The spike in price came after a stock analyst upgraded ROKU stock from a hold to a buy rating, with a potential upside of around 14%.
The upgrade is based on an improved outlook for Roku in 2023. Analysts expect an upward estimate revision coupled with sustained growth in market share in the streaming TV space.
Roku has been on an upward trend for most of 2023. The stock is up 153.90% year-to-date. It has had 38 price changes in the last year that were bigger than 5%. The recent 8.48% gain indicates that the market considers ROKU’s new rating meaningful.
The most recent price jump was at the start of November, when ROKU stock gained 15.6% after its Q3 2023 results were released. The results surpassed analysts’ expectations in terms of revenue and EPS. The revenue forecast for Q4 was in line with expectations, and EBITDA guidance was much higher. Overall, the Q3 results were positive, which boosted investor confidence in the stock.
Roku Earnings Report
Roku released its Q3 earnings report on November 1, 2023. It reported an EPS of -$ -0.33, surpassing EPS estimates by 82.79%. The reported revenue of $912.02 million also beats estimates by 6.58%. Based on the released figures, revenue was up 20% year-over-year. Additionally, platform revenue, the largest segment, was up 18% year-over-year and stood at $787 million.
In its outlook section, it predicted revenue of around $955 million in Q4. It also predicts a gross profit of around $405 million and an EBITDA of $10 million. In FY 2024, the company predicts a positive adjusted EBITDA with improvements moving forward.
Stock Forecast
According to Vasily Karasyov, an analyst at Cannonball Research, ROKU stock has a potential upside of 61%. Vasily has an overall accuracy rate of 61%. However, not all analysts agree. The average high price target for the stock is $116, while the lowest is $30; the average target is $82.83, a -19.57% decrease.
Should You Buy ROKU Stock?
ROKU stock has had an excellent performance in 2023. The stock is up over 150% year-to-date. The company also forecasts it will be profitable by the end of 2024. As the US inches towards recovery, Roku will leverage its unique strengths and better economy. The company is also uniquely positioned to benefit from the ongoing cord-cutting trend. As such, 2024 could be another exemplary year for the stock.
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