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Buy Roku Stock on the Dip as a Bet on Netflix, Disney & Streaming TV Growth?

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On today’s episode of Full Court Finance here at Zacks, we break down Roku’s (ROKU - Free Report) fourth quarter fiscal 2019 financial results. We then take a look at what to expect from the streaming TV firm to see if investors should consider buying Roku stock on the dip, with Disney (DIS - Free Report) , Netflix (NFLX - Free Report) , and others all set to expand their customer base.

Roku reported its Q4 results last Thursday and the stock fell over 6% Friday, despite initially climbing. Shares of Roku then slipped again Tuesday, which did coincide with a broader market downturn after Apple (AAPL - Free Report) said the coronavirus will hurt its quarterly sales.

Wall Street might be worried about Roku’s valuation picture. Plus, investors likely aren’t pleased by the fact that the streaming TV company is expected to report adjusted losses in fiscal 2020 and 2021, after it swung to a loss in 2019.

With that said, Roku’s portfolio is more diverse than ever and it has spent money on expansion. Roku sells multiple streaming TV players and its Roku smart TVs are widely popular. Yet, it is Roku’s advertising-heavy platform unit that has driven its strong sales growth recently.

Going forward, more advertising dollars are set to shift to digital, and the streaming TV age is really just getting started. Disney and Apple entered the market in November and Comcast (CMCSA - Free Report) and AT&T (T - Free Report) will soon enter the fray alongside Amazon (AMZN - Free Report) and industry leader Netflix.

Roku is currently a Zacks Rank #2 (Buy) and its stock price rests far below its 52-week highs.

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