Roku stock is under selling pressure after the company released the third-quarter earnings report and forecasted dismal fourth-quarter figures. The company faces a rising inflation environment that has led companies to cut online advertising a trend that we have already seen in Meta and Alphabet earnings reports. Online advertising spending grows less than the company’s expectations at the start of the year.
Here are the key points from the Roku third-quarter earnings report:
• Total net revenue grew 12% YoY to $761 million
•Net loss came up to $122.2 million or $0.88 per share, the same quarter last year posted a net profit of $68.94 million or $0.48 per share. The analyst’s estimate was for a loss of $1.28.
•Platform revenue increased 15% YoY to $670 million
• Gross profit dropped 2% to $357 million
• The company’s Active Accounts increased by 2.3 million in the quarter up to 65.4 million. The total net additions in 2021 were 1.3 million
• Streaming Hours rose by 1.1 billion hours at 21.9 billion hours
• Average Revenue Per User (ARPU) rose 10% to $44.25
• The Roku Channel streaming hours increased by 90% YoY
ROKU now expects revenue of $800 million in Q4, well below the analysts’ expectations of $897 million. The fourth quarter of 2021 revenues was reported at $865.33 million. The company said it plans to slow the hiring rate and operational expenses in the near future.
Roku ended yesterday’s trading session down 4.35% at $54.32. The market capitalization now stands at 7.49 billion. The stock has a 52-week trading range between $47.27 and $308.81. Roku (ROKU) stock hit an all-time high at $490.76 on July 27, 2021. The price-to-sales ratio is at 2.64 and the price-to-book ratio is at 2.80. The company does not pay any dividends.
The technical picture is clearly bearish for Roku stock as the price hovers below all the major simple moving averages.
Nikolas has been involved in the finance industry for over fifteen years spanning across Europe and USA with a depth of knowledge and experience within many aspects of the financial markets. Nikolas gained several years experience with some of the Europe’s leading Brokers, as equity analyst, and trader managing accounts for both Private and Corporate Investors. He enjoys both the fundamental and technical aspects of trading focusing on stock markets and all FX majors. Currently, Nikolas provides analysis and comments to online financial publications. Educational background in Economics (BSc), and Finance (MSc).