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ROKU's Q1 Estimates Bullish, 2020 View Invalid on Coronavirus Woes
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Roku’s (ROKU - Free Report) shares surged more than 10% on Apr 14 after the company announced that first-quarter 2020 revenues are now anticipated to be slightly higher than its guidance issued on Feb 13.
Per the earlier guidance, revenues were expected between $300 million and $310 million, up 48% year over year at midpoint.
Moreover, gross profit was expected between $143 million and $148 million. Further, adjusted EBITDA loss was predicted between $18 million and $23 million. The company now envisions these metrics to be in line with its past projection.
Markedly, the Zacks Consensus Estimate for first-quarter revenues is pegged at $282.5 million, indicating 36.7% growth from the year-ago quarter’s reported figure. Moreover, the consensus mark for loss has narrowed by a penny to 46 cents per share in the past 30 days.
The stock has been down 20.4% on a year-to-date basis, underperforming the industry’s 8.3% decline.
Roku now estimates nearly 3 million active account additions since Dec 31, 2019 totaling to 39.8 million as of Mar 31, 2020. The company’s active accounts jumped 36% year over year to 36.9 million in fourth-quarter 2019.
Moreover, Roku expects streaming hours to shoot up 49% year over year to 13.2 billion despite a negative impact from the rollout of “Are you still watching" feature early first-quarter 2020.
The solid surge in active accounts and viewing is attributed to the COVID-19 outbreak that forced more and more people to stay home.
Roku is scheduled to report first-quarter 2020 earnings results on May 7.
2020 View Null and Void Amid Uncertainty
Roku, however, withdrew its 2020 guidance due to the economic uncertainty stemming from the coronavirus outbreak.
Notably, for 2020, the company projected revenues between $1.58 billion and $1.62 billion. At midpoint, revenues were expected to grow 42% year over year.
Moreover, gross profit was estimated between $720 million and $740 million, up 47% year over year at midpoint. Adjusted EBITDA was assumed between ($10 million) and $10 million.
Significantly, the Zacks Consensus Estimate for 2020 revenues stands at $1.52 billion, suggesting 34.8% growth from the prior-year reported number. However, the consensus mark for loss has moved 11% south to $1.51 per share.
Conclusion
Notably, streaming hours growth is expected to boost TV streaming advertising on Roku’s platform. The launch of streaming services, namely Apple TV+ and Disney+ from Apple (AAPL - Free Report) and Disney (DIS - Free Report) , respectively, during the fourth quarter of 2019 helped driving 60% year-over-year increase in streaming hours to touch 11.7 billion.
Furthermore, the estimated increase in active accounts reflects the mounting popularity of The Roku Channel. The recent launch of The Roku Channel in the UK with free access to more than 10000 movies, TV episodes and documentaries is expected to attract users seeking free supplement to their existing TV streaming service subscriptions, which may include Netflix (NFLX - Free Report) , Disney+ and Amazon prime videos. This also bodes well for Roku’s top line in the long haul.
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ROKU's Q1 Estimates Bullish, 2020 View Invalid on Coronavirus Woes
Roku’s (ROKU - Free Report) shares surged more than 10% on Apr 14 after the company announced that first-quarter 2020 revenues are now anticipated to be slightly higher than its guidance issued on Feb 13.
Per the earlier guidance, revenues were expected between $300 million and $310 million, up 48% year over year at midpoint.
Moreover, gross profit was expected between $143 million and $148 million. Further, adjusted EBITDA loss was predicted between $18 million and $23 million. The company now envisions these metrics to be in line with its past projection.
Markedly, the Zacks Consensus Estimate for first-quarter revenues is pegged at $282.5 million, indicating 36.7% growth from the year-ago quarter’s reported figure. Moreover, the consensus mark for loss has narrowed by a penny to 46 cents per share in the past 30 days.
The stock has been down 20.4% on a year-to-date basis, underperforming the industry’s 8.3% decline.
Roku, Inc. Price and Consensus
Roku, Inc. price-consensus-chart | Roku, Inc. Quote
Upbeat Q1 Forecast for Active User Base
Roku now estimates nearly 3 million active account additions since Dec 31, 2019 totaling to 39.8 million as of Mar 31, 2020. The company’s active accounts jumped 36% year over year to 36.9 million in fourth-quarter 2019.
Moreover, Roku expects streaming hours to shoot up 49% year over year to 13.2 billion despite a negative impact from the rollout of “Are you still watching" feature early first-quarter 2020.
The solid surge in active accounts and viewing is attributed to the COVID-19 outbreak that forced more and more people to stay home.
Roku is scheduled to report first-quarter 2020 earnings results on May 7.
2020 View Null and Void Amid Uncertainty
Roku, however, withdrew its 2020 guidance due to the economic uncertainty stemming from the coronavirus outbreak.
Notably, for 2020, the company projected revenues between $1.58 billion and $1.62 billion. At midpoint, revenues were expected to grow 42% year over year.
Moreover, gross profit was estimated between $720 million and $740 million, up 47% year over year at midpoint. Adjusted EBITDA was assumed between ($10 million) and $10 million.
Significantly, the Zacks Consensus Estimate for 2020 revenues stands at $1.52 billion, suggesting 34.8% growth from the prior-year reported number. However, the consensus mark for loss has moved 11% south to $1.51 per share.
Conclusion
Notably, streaming hours growth is expected to boost TV streaming advertising on Roku’s platform. The launch of streaming services, namely Apple TV+ and Disney+ from Apple (AAPL - Free Report) and Disney (DIS - Free Report) , respectively, during the fourth quarter of 2019 helped driving 60% year-over-year increase in streaming hours to touch 11.7 billion.
Moreover, the acquisition of Dataxu (a demand-side advertising platform) is expected to strengthen this Zacks Rank #2 (Buy) company’s OTT advertising roadmap. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Furthermore, the estimated increase in active accounts reflects the mounting popularity of The Roku Channel. The recent launch of The Roku Channel in the UK with free access to more than 10000 movies, TV episodes and documentaries is expected to attract users seeking free supplement to their existing TV streaming service subscriptions, which may include Netflix (NFLX - Free Report) , Disney+ and Amazon prime videos. This also bodes well for Roku’s top line in the long haul.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>