ariMarketing News
Thursday, March 30, 2023
Want Traffic?
  • Home
  • Entrepreneurship
  • Marketing
    • Digital Marketing
    • Mobile Marketing
    • Content Marketing
    • B2B Marketing
    • B2C Marketing
    • Email Marketing
    • Video Marketing
  • Social Media
  • SEO
  • AI
  • Graphic Design
  • PR
  • Videos
  • More
    • Sales Conversion
    • Website Development
    • Traffic/Lead Generation
en English
zh-CN 简体中文en Englishfr Françaisde Deutschhi हिन्दीit Italianoja 日本語ru Русскийes Españolta தமிழ்th ไทยtr Türkçe
No Result
View All Result
  • Home
  • Entrepreneurship
  • Marketing
    • Digital Marketing
    • Mobile Marketing
    • Content Marketing
    • B2B Marketing
    • B2C Marketing
    • Email Marketing
    • Video Marketing
  • Social Media
  • SEO
  • AI
  • Graphic Design
  • PR
  • Videos
  • More
    • Sales Conversion
    • Website Development
    • Traffic/Lead Generation
No Result
View All Result
ariMarketing News
No Result
View All Result
  • Marketing
  • Social Media
  • SEO
  • Entrepreneurship
  • AI
  • Graphic Design
  • Public Relations
  • Sales Conversion
  • Website Development
  • Traffic/Lead Generation
  • Videos
Home Entrepreneurship

Sell This Streaming Stock Before It Falls Further

September 20, 2022
in Entrepreneurship
109 1
A A
0
21
SHARES
689
VIEWS
Share on FacebookShare on Twitter

Shares of television streaming platform provider Roku (ROKU) have plummeted 77.5% over the past year and are trading close to 80% below its 52-week high. The company reported disappointing financials, raising concerns over its slowing ad spending and weak profit margins. Given its lofty valuation and poor earnings growth prospects, we think the stock is best avoided now. Read on….

Roku, Inc. (ROKU) runs a television streaming platform. The business is divided into two operational segments: Platform and Player. The stock has dropped 68% year-to-date and 11.4% over the past three months to close its last trading session at $73.02.

ROKU has been impacted by growing worries about dwindling consumer discretionary spending, multi-decade high inflation, and increasing competition. This year, lower consumer and advertiser demand significantly impacted the company’s financial performance.

The company claimed that the second quarter’s macroeconomic uncertainties caused a significant slowdown in TV advertising spending, which hampered platform revenue growth. Both consumers and advertisers significantly reduced their ad scatter market spending owing to consumers’ tightening of discretionary spending.

Here’s what could shape ROKU’s performance in the near term:

Disappointing Financials

ROKU’s total revenue increased 18.5% year-over-year to $764.41 million for the second quarter ended June 30, 2022. However, its operating loss came in at $110.51 million, compared to an operating income of $69.08 million a year ago.

The company reported a net loss of $112.32 million, compared to a net income of $73.47 million in the prior-year quarter. Its loss per share amounted to $0.82. In addition, its cash and cash equivalents came in at $2.05 billion, representing a decrease of 4.5% for the six months ended June 30.

Negative Profit Margins

ROKU’s trailing-12-month CAPEX/Sales of 2.6% is 39.7% lower than the industry average of 4.3%. Also, its trailing-12-month ROA, net income margin and ROE are negative 1.07%, 1.51%, and 1.72%, respectively. Moreover, its trailing-12-month EBITDA margin of 5.74% is 70.7% lower than its industry average of 19.6%.

Premium Valuation

In terms of trailing-12-month Price/Cash Flow, the stock is currently trading at 137.26x, 1613.6% higher than the industry average of 8.01x. Also, its forward Price/Book of 3.87x is 106% higher than the industry average of 1.88x. Moreover, ROKU’s forward Price/Sales of 3.23x is 158.5% higher than the industry average of 1.25x.

Poor Earnings Estimates

Street expects the company’s EPS to decline 364.6% in the current quarter ending September 2022 and 717.6% in the next quarter ending December 2022. Also, its EPS is expected to remain negative in the current and next years. In addition, ROKU failed to surpass the consensus EPS estimates in two of the trailing four quarters.

POWR Ratings Reflect Bleak Outlook

ROKU has an overall F rating, which equates to a Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight different categories. ROKU has an F grade for Growth and Sentiment and a D for Stability. Analysts’ poor earnings projections are in sync with the Sentiment and Growth grades. In addition, the stock beta of 1.68 justifies the Stability grade.

Of the 59 stocks in the C-rated Consumer Goods industry, ROKU is ranked #56.

Beyond what I’ve stated above, you can view ROKU ratings for Quality, Momentum, and Value here.

Bottom Line

ROKU’s poor bottom-line performance owing to slowing consumer demand due to persistent inflationary pressures is concerning. Furthermore, rising competition may further limit the company’s prospects.

Also, the stock is currently trading below its 50-day and 200-day moving averages of $77.43 and $120.8, respectively, indicating a bearish sentiment. Given its poor financials, weak earnings projections, and lower-than-industry profit margins, we think it may be prudent to avoid the stock now.

How Does Roku Inc. (ROKU) Stack Up Against its Peers?

While ROKU has an overall F rating, one might want to consider its industry peers, Mannatech Incorporated (MTEX) and Ennis Inc. (EBF), which have an overall A (Strong Buy) rating.


ROKU shares fell $0.72 (-0.99%) in premarket trading Tuesday. Year-to-date, ROKU has declined -68.44%, versus a -18.19% rise in the benchmark S&P 500 index during the same period.


Pragya Pandey

Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.

More…

The post Sell This Streaming Stock Before It Falls Further appeared first on StockNews.com

Read the full article here

Tags: FinanceStocks

Subscribe to our mailing list to receives daily updates!

We won't spam you

Previous Post

Financial concerns threaten the 2023 holiday shopping season

Next Post

The #1 SALES TECHNIQUE For Creative Entrepreneurs

Related Posts

WPP expands influencer marketing buy-in with Goat acquisition
Entrepreneurship

WPP expands influencer marketing buy-in with Goat acquisition

March 27, 2023
Mike’s Hard revives fan-favorite flavor with ‘comeback’ hotline
Entrepreneurship

Mike’s Hard revives fan-favorite flavor with ‘comeback’ hotline

March 24, 2023
Ford shifts toward purpose with ‘Euphoria’ star Sydney Sweeney
Entrepreneurship

Ford shifts toward purpose with ‘Euphoria’ star Sydney Sweeney

March 22, 2023
MLS strikes TikTok partnership as threat of US ban looms
Entrepreneurship

MLS strikes TikTok partnership as threat of US ban looms

March 20, 2023
Tide inserts Kumail Nanjiani into messy viral videos for bigger pods push
Entrepreneurship

Tide inserts Kumail Nanjiani into messy viral videos for bigger pods push

March 17, 2023
Sephora, TikTok launch content creator program
Entrepreneurship

Sephora, TikTok launch content creator program

March 16, 2023
Leave Comment

Subscribe to our mailing list to receive updates and special offers!

We will NOT span you!

Check your inbox or spam folder to confirm your subscription.

Latest Articles

Michelob Ultra is first sponsor of network dedicated to women’s sports

Michelob Ultra is first sponsor of network dedicated to women’s sports

March 29, 2023
10-Point Checklist for Successful Local SEO

10-Point Checklist for Successful Local SEO

March 29, 2023
Pepsi embraces maximalism for first visual overhaul in 14 years

Pepsi embraces maximalism for first visual overhaul in 14 years

March 28, 2023
Heinz rejects imposters for ‘Ketchup Fraud’ campaign

Heinz rejects imposters for ‘Ketchup Fraud’ campaign

March 28, 2023
Identifying B2B and B2C consumers in a privacy-driven environment: The MarTech Conference keynote | MarTech

Identifying B2B and B2C consumers in a privacy-driven environment: The MarTech Conference keynote | MarTech

March 28, 2023
ariMarketing News

Latest Marketing and Entrepreneurship news and articles from the most trusted sources, follow us to get the latest news and tips directly to your inbox.


Learn more

Sections

  • Artificial Intelligence
  • B2B Marketing
  • B2C Marketing
  • Content Marketing
  • Digital Marketing
  • Email Marketing
  • Entrepreneurship
  • Graphic Design
  • Mobile Marketing
  • Public Relations
  • Sales Conversion
  • SEO
  • Social Media
  • Traffic/Lead Generation
  • Uncategorized
  • Video Marketing
  • Videos
  • Website Development

Newsletter

Subscribe to our mailing list to receive updates and special offers!

We will NOT span you!

Check your inbox or spam folder to confirm your subscription.

  • Privacy
  • Terms
  • Press Release
  • Advertise
  • Contact

© 2022 ariMarketing - All rights reserved.

No Result
View All Result
  • Home
  • Entrepreneurship
  • Marketing
    • Digital Marketing
    • Mobile Marketing
    • Content Marketing
    • B2B Marketing
    • B2C Marketing
    • Email Marketing
    • Video Marketing
  • Social Media
  • SEO
  • AI
  • Graphic Design
  • PR
  • Videos
  • More
    • Sales Conversion
    • Website Development
    • Traffic/Lead Generation

© 2022 ariMarketing - All rights reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.