![]() The company just received over $1 billion in up-front commitments - ad slots purchased ahead of time, a record for Roku. That said, ad dollars are flowing toward Roku's platform now. But perhaps smart TVs with non-Roku operating systems will eventually steal market share. It's possible that Roku's platform is instrumental in helping consumers initially cut the cord. internet revolution but eventually lost as new ways to access the internet emerged. I'm reminded of former public company AOL (also known as America Online). Of course, consumers switching to streaming doesn't automatically mean Roku will be a long-term winner. consumers can be reached via streaming, expect a greater percentage of advertising dollars to pour into the space, to Roku's benefit. households are expected to use traditional pay-TV sources like cable by next year. In other words, the majority will either have no TV at all or will stream video content. And with its 63.1 million active accounts, Roku is poised to be a primary beneficiary of the shift.Īccording to eMarketer data shared by Roku, less than half of U.S. Millions of people are ditching cable and other TV sources in favor of streaming. But I'm unwavering in my belief in Roku's potential due to the underlying trend propelling the business forward. Whether you're thinking of buying Roku stock for the first time or you're already down 50% or more in your Roku investment, the question is the same: Can Roku stock beat the market average from here? For my part, I believe Roku can indeed be a market-beating investment. Here's why Ark Invest's price target doesn't matterīefore Roku shareholders rush for the exits, consider this: Roku doesn't need to hit $605 per share by 2026 to be a life-changing investment. If it does, your 1,000 shares are worth 100,000. For all of these reasons, Roku stock might not reach $605 per share by 2026. You look at the 100 stock and imagine your penny stock getting there. Therefore, I wouldn't hold my breath for Roku stock's valuation going up over the next 4.5 years - that's hard to predict. Generally speaking, investors should expect valuations for growth stocks like Roku to come down over time as the company matures and growth slows. For perspective, this is nearly double its P/S valuation right now, as the chart shows. ![]() And it expects its market capitalization to be $93 billion, implying a price-to-sales (P/S) ratio of about 6.5. In its report, Ark Invest says it expects Roku to generate $14.41 billion in revenue in 2026. Another thing to consider is Ark Invest's assumed valuation for Roku stock.
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