Roku: A Long-Term Opportunity Amid Recent Drop

Summary:

• Roku’s Q3 2024 revenue surpassed $1 billion for the first time, driven by a 16% YoY increase in platform services and improving operating margins.
• Despite recent stock volatility and a cautious Q4 earnings outlook, the streaming giant continues to expand its advertising reach through strategic partnerships and new monetization features.
• Roku is capitalizing on global streaming growth by targeting international markets, with plans to expand household reach to 100 million by 2025.
• The stock trades at an attractive ~2x EV/S multiple, supported by a strong cash balance of $2.1 billion, providing a solid buffer against economic challenges.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of ROKU either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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