KeyBanc: What To Expect From Roku's Q1

Roku Inc ROKU is scheduled to report first-quarter results after Wednesday's market close, and KeyBanc Capital Markets expects the figures to arrive in-line with expectations at the very least. 

The Analyst

KeyBanc's Evan Wingren maintains an Overweight rating on Roku's stock with an unchanged $42 price target.

The Thesis

Here's a summary of what Wingren is modeling for Roku's Q1 print: 

• EPS of negative 14 cents on revenue of $130 million (30-percent growth).
• Player revenue of $59 million and platform revenue of $71 million.
• Gross margin of 42 percent.
• Active account growth of 40 percent from one year ago to around 20 million.
• Gross profit of $55 million (40-percent growth).
• The Roku Channel has been live for three quarters and should drive higher advertising inventory and help platform revenue and overall margin expansion.

The analyst is expecting Roku's management to guide the following for the second quarter and full year:

• Q2 revenue of $138 million and gross profit of $60 million.
• Full-year revenue of $675 million and gross profit of $290 million.

Thoughts On The Stock

Roku's "symbiotic relationship" with TV OEMs gives the streaming video provider a unique position to grow its active accounts and expand its leadership in TV OS development, Wingren said. The analyst continues to recommend investors be buyers of the stock, which is trading at a discount to its peers at 7.5x NTM EV/GP versus an average of 10x, despite boasting higher gross profit growth.

Price Action

Shares of Roku were trading higher by more than 2 percent early Wednesday morning.

Related Links:

Roku: 4 Reasons Why KeyBanc Recommends The Streaming Stock

Roku's Valuation Reflects Its Advertising Opportunity, DA Davidson Says In Initiation

Photo courtesy of Roku.