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Roku (ROKU) Adds New Licensee Brands for Roku TV in 2020

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Roku, Inc. (ROKU - Free Report) continues to expand its reach. The company revealed that there will be at least 15 manufacturers making Roku TVs in 2020, including its own branded units, at CES 2020.

Partners will include Walmart’s (WMT - Free Report) ATVIO, Element, Hisense, Hitachi, InFocus, JVC, Magnavox, onn., Philips, Polaroid, RCA, Sanyo, TCL, and Westinghouse. These brands will offer televisions across the United States, Canada, Mexico, and the UK.

Current partner Westinghouse will increase Roku TV offerings in Mexico while new partners Polaroid, InFocus and Walmart’s ATVIO will sell Roku TV models in Mexico as well.

Roku already works closely with Walmart, offering the retailer exclusive devices like Roku media players that are only sold at Walmart, as well as smart audio devices including a soundbar and subwoofer sold under Walmart’s own brand.

Moreover, Hisense and TCL will also extend their Roku TV options with new models later in 2020.

Roku, Inc. Price and Consensus

Roku, Inc. Price and Consensus

Roku, Inc. price-consensus-chart | Roku, Inc. Quote

Roku TV: A Key Catalyst

Roku TV models give users access to thousands of free and paid streaming channels, easy cross-channel search and customizable home screens on Roku’s mobile app.

Roku TV’s licensing program offers OEMs and TV brands a TV hardware reference design and the Roku operating system, which includes features like customizable home screen, advanced search and support for private listening through the Roku app.

Moreover, 4K Roku TV models also support HDR 10 and some support Dolby Vision HDR, Dolby Atmos sound and Full-Array Local Dimming (FALD), a technology that offers better contrast.

Roku's active accounts increased 36% year over year, while its streaming hours and average revenue per users grew 68% and 32%, respectively in the third quarter of 2019.

The increased amount of time spent browsing the company’s hub also bodes well for the business as it sells advertising on the hub. As more media giants launch their respective streaming services, they might advertise their new offerings on a platform like Roku.

Roku Rides on Smart TV Growth

The company believes that Roku TV represented more than one in three smart TVs sold in the United States during the first nine months of 2019. In third-quarter fiscal 2019, the company's revenues soared on the strength of 79% year over year growth in its platform segment.

In September 2019, Roku announced expansion of Roku TV licensing program in Europe, allowing TV manufacturers to license Roku TV reference designs and use Roku OS.

Roku stated that Hisense will begin selling Roku TV models in the UK beginning fourth quarter. The new Hisense Roku TV models are expected to come with 4K Ultra HD resolutions and HDR, and in sizes ranging up to 65 inches.

With new brands partnering with Roku and existing partners expanding their collections, Roku hopes to bring affordable, easy-to-use TVs to consumers in North America, Europe and beyond.

Zacks Rank & Stocks to Consider

Roku has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader consumer-discretionary sector include Nexstar Media Group, Inc (NXST - Free Report) and Sony Corporation (SNE - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Nexstar and Sony is projected to be 10% and 7.7%, respectively.

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