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Roku Continues To Leap Past Easy Guidance, But That Won't Last Forever

Sep. 21, 2023 5:28 PM ETRoku, Inc. (ROKU) StockDIS, CHTR2 Comments
Geoffrey Seiler profile picture
Geoffrey Seiler


  • Roku, Inc. stock has performed well after the company low-balled guidance ahead of the year.
  • The TV broadcast and streaming markets are undergoing changes, making the future unpredictable.
  • When taking into account stock comp, Roku stock's valuation looks very high even on outer year numbers.

Roku To Layoff 200 Employees As Tech Downsizing Continues

Justin Sullivan

Back in April, I wrote that while the numbers and trends for Roku, Inc. (NASDAQ:ROKU) looked poor, I was more neutral on the name, as I thought it had lowballed guidance. Since then, the stock has risen over

This article was written by

Geoffrey Seiler profile picture
Former Senior Equity Analyst at $600M long-short hedge fund Raging Capital.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (2)

sancerrefrankie profile picture
what did you make of the roku report they seem to have beat last qtr and this qtr is this opp to short some shares here or has thesis changed t y @Geoffrey Seiler
I think ROKU is at an interesting crossroads.

First, we know ad $ are shifting to streaming. If ROKU simply maintains its market share the shift to streaming in the US alone will generate 4x ad revenue growth.

Second, we are witnessing a company begin to rationalize its cost structure to begin to focus on profitability. The third round of cost reductions is the evidence of this belief.

During the pandemic, ROKU posted eps of $2.20 per share on a TTM basis before aggressively overspending to drive market share gains. ROKU has the gross margins and scalability to become a very profitable $10B revenue business in the US alone imo. Lots of upside here but it will take time to achieve.
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