What to Expect from Roku's Earnings

Roku ROKU is preparing to release its quarterly earnings on Wednesday, 2024-10-30. Here's a brief overview of what investors should keep in mind before the announcement.

Analysts expect Roku to report an earnings per share (EPS) of $-0.32.

The market awaits Roku's announcement, with hopes high for news of surpassing estimates and providing upbeat guidance for the next quarter.

It's important for new investors to understand that guidance can be a significant driver of stock prices.

Past Earnings Performance

Last quarter the company beat EPS by $0.19, which was followed by a 3.96% drop in the share price the next day.

Here's a look at Roku's past performance and the resulting price change:

Market Performance of Roku's Stock

Shares of Roku were trading at $76.05 as of October 28. Over the last 52-week period, shares are up 26.06%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.

Insights Shared by Analysts on Roku

For investors, grasping market sentiments and expectations in the industry is vital. This analysis explores the latest insights regarding Roku.

The consensus rating for Roku is Buy, derived from 21 analyst ratings. An average one-year price target of $84.62 implies a potential 11.27% upside.

Peer Ratings Comparison

The following analysis focuses on the analyst ratings and average 1-year price targets of TKO Group Holdings, Warner Music Gr and Cinemark Hldgs, three prominent industry players, providing insights into their relative performance expectations and market positioning.

• Analysts currently favor an Buy trajectory for TKO Group Holdings, with an average 1-year price target of $139.3, suggesting a potential 83.17% upside.
• As per analysts' assessments, Warner Music Gr is favoring an Neutral trajectory, with an average 1-year price target of $34.25, suggesting a potential 54.96% downside.
• Cinemark Hldgs received a Outperform consensus from analysts, with an average 1-year price target of $29.0, implying a potential 61.87% downside.

Peers Comparative Analysis Summary

In the peer analysis summary, key metrics for TKO Group Holdings, Warner Music Gr and Cinemark Hldgs are highlighted, providing an understanding of their respective standings within the industry and offering insights into their market positions and comparative performance.

Key Takeaway:

Roku ranks at the top for Revenue Growth and Gross Profit among its peers. However, it ranks at the bottom for Return on Equity. Overall, Roku's performance is strong in terms of revenue and profit growth, but its return on equity lags behind its peers.

Unveiling the Story Behind Roku

Roku enables consumers to stream television programming. It has more than 80 million streaming households and provided well over 100 billion streaming hours in 2023. Roku is the top streaming operating system in the US, reaching more than half of broadband households, according to the company. Roku's OS is built into streaming devices and televisions that Roku sells and on connected televisions from other manufacturers that license Roku's name and software. Roku also operates the Roku Channel, a free, ad-supported streaming television platform that offers a mix of on-demand and live television programming. Roku generates revenue primarily from selling devices, licensing, and advertising, and it receives fees from subscription streaming platforms that sell subscriptions through Roku.

Roku: Financial Performance Dissected

Market Capitalization Analysis: The company's market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.

Revenue Growth: Over the 3 months period, Roku showcased positive performance, achieving a revenue growth rate of 14.28% as of 30 June, 2024. This reflects a substantial increase in the company's top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Communication Services sector.

Net Margin: Roku's net margin excels beyond industry benchmarks, reaching -3.51%. This signifies efficient cost management and strong financial health.

Return on Equity (ROE): Roku's ROE is below industry averages, indicating potential challenges in efficiently utilizing equity capital. With an ROE of -1.43%, the company may face hurdles in achieving optimal financial returns.

Return on Assets (ROA): Roku's ROA is below industry standards, pointing towards difficulties in efficiently utilizing assets. With an ROA of -0.82%, the company may encounter challenges in delivering satisfactory returns from its assets.

Debt Management: Roku's debt-to-equity ratio is below the industry average. With a ratio of 0.26, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

To track all earnings releases for Roku visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.