Roku gets hit hard in streaming wars

Dan Gallagher for The Wall Street Journal:

Roku is one of the smallest soldiers in the so-called streaming wars. It may also have one of the biggest targets on its back.

The maker of TV-streaming devices registered a stock decline of 16% Thursday after reporting third-quarter results the previous day… The company’s revenue forecast for the fourth quarter was deemed a disappointment, with the midpoint suggesting 39% growth from a year earlier, barely above Wall Street’s targets. The addition of 1.7 million net new active accounts in the third quarter also fell slightly below analyst forecasts.

Before Wednesday’s results, Roku’s share price had surged nearly fivefold just since the start of the year. Even with Thursday’s drop, the stock is still fetching about 10 times forward revenue… That is a lot to put on a company still not generating operating earnings or positive free cash flow on a reliable basis. And it makes Roku’s shares extra vulnerable to even small perceived challenges. The stock fell in September after Apple Inc. laid out the plans for its new, low-price streaming service that will actually end up contributing to Roku’s platform business.

MacDailyNews Take: For some perspective, Roku’s quarterly revenue of $260.9 million was generated by Apple last quarter some 2.7 times every day.

FYI: Owners of select Roku devices can watch Apple TV+ after adding the Apple TV channel on following devices:

Owners of select Roku devices can watch Apple TV+ via the following devices


    1. If Roku folds, it won’t be because of Apple. It would be Amazon.

      I worked the electronics counter at Target for a while, and out of 100 streaming devices, we would sell 80 FireTV Sticks, 19 Rokus, and maybe one AppleTV box.

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