Streaming hardware and platform company Roku Inc ROKU is set to report third-quarter financial results after market close Wednesday, Nov. 1.
Here is a look at the earnings expectations, what analysts were saying and key items for investors to watch.
Earnings Estimates: Analysts expect Roku to report third-quarter revenue of $855.16 million, according to data from Benzinga Pro.
The company reported third-quarter revenue of $761.37 million in the prior year. Roku has beaten analysts' estimates for revenue in four of the last five quarters, including four straight quarters.
Roku said it expected third-quarter revenue to be $815 million previously this year.
Analysts anticipated Roku to report a loss of $2.04 per share in the third quarter. The company reported a loss of 88 cents in the third quarter last year. The company had beaten earnings per share estimates in three of the last five quarters.
Related Link: Roku Joins The Live Sports Streaming Race, Grabs Rights To This Sport
What Analysts are Saying: The third quarter from Roku could be a mixed print from the company according to KeyBanc analyst Justin Patterson.
The analyst, who had a Sector Weight rating and no price target, had a cautious outlook for the company in the near term.
"Our view is more caution around upfront, scatter, and macro could drive a reset to Street 2024E revenue and EBITDA," Patterson said. "We view shares as rangebound until the macro improves and/or Roku expands disclosures so investors can better trace the arc of recovery."
Patterson said third-quarter revenue could come in above estimates with fewer upfront cancellations and the performance of NFL Sunday Ticket in September.
"Now that Roku has transitioned to its new round of upfronts and the scatter market remains subdued, this suggests the company has less visibility and will likely issue cautious guidance. Our view is this could drive downward revisions for 2024E revenue."
Here's a look at other analyst ratings in the month of October for Roku:
Seaport Global: Initiated with Neutral, no price target
Piper Sandler: Reiterated Neutral, lowered price target from $90 to $81
Truist Securities: Reiterated Hold, lowered price target from $80 to $70
Moffett Nathanson: Upgraded from Sell to Neutral, price target of $55
Key Items to Watch: Among the key items to watch for Roku with its earnings report is an update on the Roku Channel, the company's home of original and acquired content.
In the second quarter, Roku said hours watched on the channel were up 50% year-over-year. The company also said it had around 1.1% of the total U.S. television viewing market represented by The Roku Channel. An update on the Roku Channel could be a catalyst for investors.
Another item to watch is a potential Netflix Inc NFLX advertising plan bundle. According to Patterson, Netflix said it was "working to include the ad plans in devices and ISP partner bundles." The analyst said given Roku's long history with Netflix, the company could be a "logical" partner.
The impact of the Hollywood Strike has been a popular topic from media and streaming companies and Roku will likely share an update on this front. An update on new content could also be an item investors are awaiting with Roku landing several originals.
Roku landed the exclusive streaming rights to Formula E races. Given the topic of sports media rights being popular, analysts may also ask Roku if it has more ambitions to land more rights for sports.
Another big topic will likely be the overall macro environment and advertising market for streaming companies. Any insight into this area from Roku could help potentially boost the company's shares.
ROKU Price Action: Roku shares were trading up 5.39% at $59.39 on Tuesday at publication, versus a 52-week trading range of $38.26 to $98.44. Shares of Roku are up 45% year-to-date in 2023 but remained significantly down from the $200 to $400 range in 2021.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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