Roku Q3: Strong Growth (Rating Upgrade)

Summary:

  • Roku delivered a significant earnings beat for Q3, with adjusted EPS surpassing estimates by a wide margin.
  • The streaming platform saw growth in active accounts and streaming hours, indicating favorable core streaming trends.
  • The company’s Q4 revenue forecast is strong, but the average revenue per user trend is still weak, posing a potential risk.
  • Due to improving top line growth and positive adjusted EBITDA, I am upgrading to hold.

Roku To Layoff 200 Employees As Tech Downsizing Continues

Justin Sullivan

Shares of Roku (NASDAQ:ROKU) exploded higher by 31% after the streaming company delivered a solid earnings beat for the third-quarter last week and management said that the platform is benefiting from a strong rise in video ads. Roku’s streaming

Actual Results

Q3’23

Q2’23

Q1’23

Q4’22

Q3’22

Growth Y/Y

Active Accounts (millions)

75.8

73.5

71.6

70.0

65.4

16%

Streaming Hours (billions)

26.7

25.1

25.1

23.9

21.9

22%

Average Revenue Per User/ARPU ($)

$41.03

$40.67

$40.67

$41.68

$44.01

-7%


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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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