Roku shares climb after narrower than expected loss, jump in active users; analysts reactions mixed
Investing.com -- Roku Inc (NASDAQ:ROKU) shares were higher after the streaming platform reported a narrower-than-expected first-quarter loss.
Revenue rose to $741 million and the per-share loss was $1.38, while analysts expected revenue of $708 million and a loss of $1.48 a share. Revenue was up 1% from last year.
Shares are up 2% in premarket Thursday. They are up 38.9% this year.
Platform revenue, including licensing and advertising, was $634.6 million, while sales of streaming hardware and other device revenue was $106.4M. “While ad spend on the Roku platform in verticals including financial services and M&E remained pressured, verticals such as travel and health and wellness improved,” the company said.
Roku is projecting total net second-quarter revenue of roughly $770M and total gross profit of roughly $335M. “We are executing against our plan to focus investments on high-priority projects while slowing YoY operating expense growth. Given our ongoing work to reaccelerate revenue growth and improve operational efficiencies, we are committed to delivering positive Adjusted EBITDA for full year 2024.”
The company said it has a partnership with Instacart, the grocery delivery platform, to help consumer packaged goods advertisers measure whether consumers are purchasing products on Instacart after seeing an ad on the Roku platform.
Morgan Stanley analysts reiterated an Underweight rating on ROKU shares.
"In keeping with the recent past, quarterly results were better than expected and the fwd guidance modestly lower. Stepping away from expectations, Roku continues to see declining Platform segment gross profit due to advertising headwinds while the timeline to significant profitability is unclear."
On the other hand, Oppenheimer analysts stay Outperform but cut target to $75 from the prior $85 per share.
"Maintaining Outperform rating as Platform revenue has stabilized, with upcoming tailwinds from advertisers, agency, retail media and DSP integrations... Given headwind from slowing ad spend by SVOD providers and higher scatter market exposure, ROKU should be one of the first beneficiaries of any rebound in the ad market," the analysts said in a note.
(Additional reporting by Senad Karaahmetovic)
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