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We are currently in the midst of financial year-end season. Roku (Roku 2.40%) is one of hundreds of widely followed companies delivering quarterly updates this week. The company, which makes North America’s leading television streaming operating system, is scheduled to report fourth-quarter results after the market closes on Thursday. Many people will appreciate its performance.
Roku stock has soared 60% since the company announced impressive third-quarter results three months ago. All of these gains, and some, occurred in his November, when the stock price rose 75% that month. Roku stock would inch back in December and again in January, but is back on the rise this month ahead of an important financial update.
california streaming
Over the past year, Roku’s stock price has more than doubled. This explains why his stock price more than doubled in 2023. By the end of September, Roku’s platform had 75.8 million active accounts, an increase of 16% over the year. It has more than double the U.S. market share of its closest competitor.
While Roku still has significant losses and continues to grow, its performance has improved in almost every other way. Sales growth has accelerated for the third consecutive quarter. Average revenue per user (ARPU), a trailing 12-month metric, turned positive sequentially in the third quarter after a year of decline. Roku customers are spending 22% more time on the platform compared to a year ago, outpacing his 16% increase in active users. In other words, engagement is unwavering.
The momentum is strong. Can this positive trend and share price increase be sustained? Everything said Thursday afternoon will carry weight.

Image source: Getty Images.
back to the future
Roque’s outlook was mixed in early November. That guidance calls for his holiday quarter revenue to be $955 million, a 10% increase compared to his $867 million in the year-ago period. That’s half the 20% year-over-year sales growth it posted in the third quarter, but Roku has historically been conservative with its guidance. The company’s streak of accelerating revenue growth will likely come to an end, but it’s not the end of the world for Roku. Analysts predict that sales will increase by 11% to his $966 million.
Investors are hoping for an improvement as Roku continues to move downward through its income statement, and it looks like that’s going to happen. Roku’s guidance calls for gross profit of $405 million, an 11% increase over last year’s results. The fourth quarter was an unusual one for Roku, with holiday gifts and promotional offers boosting revenue from devices that normally have negative gross margins.
The leading streaming service stock forecast an $85 million loss in Thursday’s report, a much smaller loss than the roughly $250 million loss it recorded in the fourth quarter of 2022. Roku also expects adjusted earnings before interest, taxes, depreciation and amortization. Amortization and amortization expenses (EBITDA) were $10 million, a reversal from negative $95 million in the same period last year. Analysts expect the company to report a loss of $0.55 per share in the fourth quarter, less than a third of its loss in the same period last year.
Expectations are high considering the stock is up 135% since the beginning of last year. It doesn’t seem like people are streaming any less now than he was 3 months ago. Additionally, the connected TV advertising market remains strong as macroeconomic concerns begin to fade. A healthy quarter, and Roku starting with a positive outlook for 2024, could keep it up.
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