Want To Invest In Roku Inc (NASDAQ:ROKU)? Here’s How It Performed Lately
Investors with a long-term horizong may find it valuable to assess Roku Inc’s (NASDAQ:ROKU) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Roku is currently performing. Check out our latest analysis for Roku
Was ROKU’s recent earnings decline indicative of a tough track record?
I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to assess different companies in a uniform manner using the latest information. For Roku, the most recent earnings -$67.2M, which compared to last year’s figure, has become more negative. Since these values may be relatively nearsighted, I have determined an annualized five-year figure for ROKU’s earnings, which stands at -$43.3M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.
Additionally, we can assess Roku’s loss by researching what has been happening in the industry on top of within the company. Initially, I want to briefly look into the line items. Revenue growth over last few years has grew by 20.26%, indicating that Roku is in a high-growth phase with expenses racing ahead elevated top-line growth rates. Inspecting growth from a sector-level, the US consumer durables industry has been growing its average earnings by double-digit 11.28% over the past year, and 15.43% over the previous five years. This suggests that any uplift the industry is enjoying, Roku has not been able to reap as much as its industry peers.
What does this mean?
Roku’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to envisage what will occur going forward, and when. The most insightful step is to assess company-specific issues Roku may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Roku to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for ROKU’s future growth? Take a look at our free research report of analyst consensus for ROKU’s outlook.
2. Financial Health: Is ROKU’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
