Here is an article that I wrote for seekingalpha. The short version upshot of this article is the two key areas to watch with Roku is how monetization measured by ARPU is trending within the USA & Canada, and secondarily how International market share growth is trending. Roku seems pretty close to saturating the US and Canadian market…so what we want to see in the USA is increased monetization. Overseas, Roku is nowhere close to saturating the market, so overseas, we want to see market share growth.
From a article titled Roku: An Over-The-Top Service by Myself:
Summary
Investors typically mistake Roku as a company selling only low margin hardware but Roku derives most of its revenue through advertising.
Roku needs to improve its monetization to improve its future valuation.
Roku’s business is being accelerated long-term by the COVID pandemic.
Roku has a large international opportunity ahead of it.
Roku has undervalued stock price in comparison to its potential growth as both a leading content aggregator and a leading advertising platform in Connected TV.
Read More: https://seekingalpha.com/article/4381454-roku-over-top-servi…
Starrob
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I don’t want to detract from your article, and I think it’s great you were able to do that, but I do want to point out that I have posted an article I wrote on Roku on SeekingAlpha in August, and one last month on CrowdStrike, both of which I thought would be of interest to the members of this forum, and both posts were promptly deleted by moderators. There seems to be inconsistency in the application of rules here, and I find that unfortunate and unprofessional in a community I had hoped to enrich.
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Hi Starrob,
thanks for sharing, this is actually a very comprehensive and well written article.
I am wondering if you have a view on current ad-spend scene… I saw both SNAP and PINS came up with huge uptick, part of which was explained as “safe choice” compared to politically maligned FB… and also other part was both these companies have been improving their tools to better service advertisers…
If this were only reasons, I am not sure if it will translate to upside for ROKU…
I think a big part of it was also that as spend was stalled in April, businesses coming back with increased spending started to look at better RoI and wider choices… and I wonder if ROKU would come up with similar large upside report for Sept quarter.
Any thoughts you can share will be helpful. thanks in advance.
2 Likes
thanks for sharing, this is actually a very comprehensive and well written article.
I am wondering if you have a view on current ad-spend scene… I saw both SNAP and PINS came up with huge uptick, part of which was explained as “safe choice” compared to politically maligned FB… and also other part was both these companies have been improving their tools to better service advertisers…
nilvest
Sorry, it has taken me so long to respond but I have been spending time writing other articles and going over a ton of earnings reports. Speaking of earnings reports both the Roku earnings report and The Trade Desk earnings report answers any questions about what to think about ad spend returning.
Roku did so well they dramatically flipped a Q3 2019 loss of almost $25.2 million to a $12.9 million profit. TTD had a even better earnings report sending the stock up over 26% today.
I am in the process of writing up other things but I might get back to what I think about Roku’s quarter, either in this thread or a future thread.
Starrob
3 Likes