Although Roku reported mixed guidance in last month’s third-quarter earnings report, Roku remains one of the fastest growing leaders in video streaming technology.
About 10% of U.S. TV viewers aged 18 to 34 are now on Roku and 10 million of its users do not have a linear TV bundles.
The platform works. There are now 23.8 million users relying on Roku — up 43% over the past year — but that is just one of the three pieces of this stacked engagement cake. The final nugget to consider is that average revenue per user is up 37% to $17.34 over the trailing 12 months.
If price can clear the weekly supply at $45(price pull back from that level now), the chart suggest price will move to the next level at $57.
Roku is expected to top $1 billion in revenue in 2019. There are now 27.1 million active users streaming through Roku, 40% more than a year earlier. These 27.1 million active users are streaming 7.3 billion hours of content, 69% more than last year.
You thought the S&P 500 was rocking higher from the December Christmas lows, have you seen a Roku chart lately. Roku’s share price rose 47% in January and then rose 48% in February. Needless to say, the weekly supply at $57 was hit and then some.
Roku shares dropped more than 10% in Wednesday after it was downgrading by Macquarie Research analyst’s Tim Nollen citing the valuation was too difficult to justify at present levels. However, Tom Forte at DA Davidson earlier in the week raised his price target on the stock to $80 and calling Roku’s nascent streaming service a driver of future growth.
The chart suggests buy Roku if and when price pulls back to the daily demand level at $50.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.