Apple AAPL is gearing up for its iPhone launch event at the Steve Jobs Theater in California on Sep 12. The technology giant is set to unveil the iPhone 15 series smartphones, including the Plus, as well as the high-end Pro and Pr
ESPN owner Walt Disney (NYSE: DIS) is fighting to increase the price of access to the channel without giving away streaming access. That's because ESPN sees a future in streaming, which may be a better business long-term than cable is today.
It's been a topsy-turvy start to the decade for Wall Street. The market's three major indexes have navigated their way through two bear markets (2020 and 2022) and a period of euphoria (2021), which saw the indexes touch multiple record-closing highs.
For Immediate ReleaseChicago, IL – September 11, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the
Netflix Inc has reappointed former White House official and U.N. ambassador Susan Rice to its board of directors, the streaming service announced on Friday.
Friday, September 8, 2023The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Chevron Corporation (CVX), AstraZeneca PLC
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Vanguard Russell 1000 Growth ETF (Symbol: VONG) where we have detected an approximate $252.2 million dollar inflow -- that's a 1.9% increase week ov
The tech giant Apple Inc. AAPL shed nearly $200 billion in market value in just two days amid the reports of China planning to expand a ban on the use of iPhones to government-backed agencies and state companies. Notably, China is
After months of lockdown in 2020-2021, there has undoubtedly been a lasting effect on the economy. Although there were a lot of negatives, several trends that were popularized by the pandemic became popular investment opportunities. While some have proven to be long-term trends, some have faded into the background. This note looks at four thematic [...]
Read more at ETFTrends.com.
Some investors define the beginning of a bull market as the point when the S&P 500 rebounds 20% from a bear market low. But other investors reserve the term for when the index reaches a new record high. The S&P 500 has already entered a bull market based on the former def
The S&P 500 and Nasdaq fell on Thursday with Apple leading declines in megacap growth stocks on concerns over China's iPhone curbs, while a fall in weekly jobless claims stoked worries about sticky inflation.
Investors in Netflix Inc (Symbol: NFLX) saw new options become available today, for the October 27th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the NFLX options chain for the new October 27th contracts and identified one put and one ca
Warner Bros. Discovery WBD announced that the HBO Original three-part documentary series, SAVIOR COMPLEX, is set to debut on Sep 26.The first episode of the docuseries will be available on Sep 26 at 9 p.m. ET/PT on HBO, followed b
Walt Disney (DIS ), the world’s largest entertainment company, fell to a 3-1/2 year low today as the company struggles to overcome numerous headwinds. Disney is facing (1) losses in its online video businesses, (2) the negative impact of the Hollywood actors and writers strikes, and (3) a fee dispute...
Since the dawn of streaming video roughly 15 years ago, the media landscape has undergone a paradigm shift. Viewers are no longer saddled with "appointment" television and movies, having embraced online content delivery. Netflix (NASDAQ: NFLX) is the principal architect of that e
While many tech stocks fell today, Roku (
NASDAQ:ROKU
) stock was a standout – a rare spot of green in a sea of red. While the bulls’ burst of confidence is justified, Roku isn’t a darling of the market. However, I’m bullish on ROKU stock because new cost-reduction plans and an optimistic revenue outlook indicate that Roku’s comeback story is just getting underway.
Headquartered in California, Roku sells equipment and related software to help users stream video and audio content, such as from a Netflix (
NASADQ:NFLX
) subscription.
Although Roku isn’t currently profitable, at least the company is taking specific steps to improve its bottom line. If Roku follows through with reduced expenditures and enhanced sales in the coming quarters, ROKU stock should have a lengthy runway to higher prices, in my opinion.
A Disappointing Day for ROKU Stock – Or Was It?
I must admit that I was pretty excited when ROKU stock burst 11% higher after the opening bell rang on Wall Street this morning. However, the stock only finished about 2.9% higher. This wasn’t Roku’s fault, though, as the market was generally dumping tech stocks throughout the day.
In any event, mature investors should focus on the long game, not intra-day share-price action. For example, DA Davidson analyst Tom Forte recently
raised his price target on Roku stock from $81 to $100 and maintained a Buy rating on the shares. According to
TheFly, Forte cited Roku’s innovative advertising efforts, including the company’s partnership with Shopify (
NYSE:SHOP
).
For a hot minute, it looked like ROKU stock might actually reach Forte’s $100 price target today. That’s not in the cards, though, so investors will need to be patient. Still, patience could pay off big-time, as Roku just delivered a
cost-cutting action plan along with an earnings beat.
Roku’s second-quarter 2023 net loss of $0.76 per share might not sound spectacular, but it’s a lot better than Wall Street’s
call for a loss of $1.27 per share. In addition, Roku reported $847 million in
revenue, up 11% year-over-year and a perfectly respectable result, if you ask me.
Building Up by Cutting Back
Perhaps these decent quarterly results prompted Macquarie analyst Tim Nollen to reiterate his Outperform rating on ROKU stock and publish a $93 price target on it. Plus, there’s another bullish consideration — Roku’s specific plan, revealed in a Form 8-K filing, to “implement additional measures to continue to bring down its year-over-year operating expense growth rate.”
In other words, Roku is getting serious about reducing its financial outlays this year. That’s a welcome development since generating strong revenue is only part of the equation; cutting costs is just as important in the final analysis.
Don’t get the wrong idea. Roku certainly expects to generate robust revenue. Compared to the company’s previous projection of $815 million in current-quarter revenue, Roku now expects to generate revenue of $835 million to $875 million for the third quarter.
However, it’s also encouraging to learn that Roku’s management knows exactly what needs to be done to cut costs in 2023. Specifically, the company plans to reduce its “office space utilization,” perform a “strategic review of its content portfolio,” reduce “outside services expenses,” slash its workforce by “approximately 10%,” and limit new hires. These measures may be uncomfortable in the short term, but they’re probably necessary in order to improve
Roku’s balance sheet.
Is ROKU Stock a Buy, According to Analysts?
On TipRanks, ROKU stock comes in as a Moderate Buy based on eight Buys, eight Holds, and two Sell ratings assigned by analysts in the past three months. The
average ROKU stock price target is $81.50, implying 5.4% downside potential.
If you’re wondering which analyst you should follow if you want to buy and sell ROKU stock, the most accurate analyst covering the stock (on a one-year timeframe) is
Jason Helfstein of Oppenheimer, with an average return of 67.1% per rating and a 69% success rate. Click on the image below to learn more.
Conclusion: Should You Consider ROKU Stock?
There’s plenty of headroom between the current Roku share price and its 2021 high. I’m not suggesting that the stock will reclaim its prior peak this year, but it feels like there’s a favorable risk-to-reward balance here.
Moreover, Roku’s management envisions strong current-quarter sales and is implementing a slew of cost-cutting measures throughout the year. Consequently, I feel that investors should consider ROKU stock for a buy-and-hold position.
Disclosure
TipRanks
Checked
4 minutes 18 seconds ago
This feed is responsible for generating the rss feed related to the topic NFLX