“Roku Inc. reported a 58% increase in revenue during the holiday quarter,” WSJ writes.
Why It Matters: The streaming-media service is another beneficiary of a pandemic-driven trend. Customers are stuck at home and therefore diverting “more of their time and money to platforms such as Roku, the leading streaming-video competitor, with about 30% of the market, according to Strategy Analytics.”
Numbers To Consider:
- Total Revenue: $649.9 Million (+58%)
- Overall Profit: $67.3 Million (+529%)
- Q4 Average Revenue Per User: $28.76 (+24%)
- Roku’s stock closed Thursday at $452.99, which is seven times higher than its 52-week low from March.
- Roku’s “player unit” reached 51.2 million active accounts by the end of 2020, which in turn streamed an average of 3.8 hours per day in Q4 (+10%).
- In January, Roku reached a multi-year deal to land the exclusive rights to Quibi’s content library for less than $100 million and will integrate the roughly 75 series into the Roku Channel.
- HBO Max and Peacock were late arrivals to Roku after the latter engaged in “high-profile standoffs as it haggled over how to divvy up the spoils of major new streaming services.”
Checking The Crystal Ball: Roku currently projects revenue of $485 million for the first quarter, a 51% jump over the year-before period. The company declined to give a full-year outlook because of pandemic-driven uncertainty.
Roku ($ROKU) smashes earnings but the stock falls. $ROKU is valued at $53 billion on $2 billion in annual revenue. That’s 48x forward Gross Profit, which seems close to fairly priced to me.
In order to believe in great returns from here, you’ll need to believe they 10x revenues over the next 8-10 years, which implies at least another couple years of 50%+ growth.