|Bid||132.96 x 800|
|Ask||133.09 x 1400|
|Day's Range||132.17 - 142.83|
|52 Week Range||26.30 - 176.55|
|Beta (5Y Monthly)||1.67|
|PE Ratio (TTM)||N/A|
|Earnings Date||Feb 19, 2020 - Feb 24, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||146.75|
Roku (NASDAQ:ROKU) has always tried to play a neutral role among a host of empires. The streaming-stick provider sells itself as a Switzerland of streaming, offering whatever you want to watch and adding its own ad-supported streaming service free to the bundle.Source: JHVEPhoto / Shutterstock.com But as "World War Streaming" heats up, this isn't good enough for the big boys. They don't want Roku to talk, they want it to die. Before anyone thinks of bidding for the prize, they want to knock it down and see if it bounces back.So far, it has bounced back. The stock fell from nearly $170 per share to just over $100 during September, then from $148 to $120 in November. But, it opened for trade Dec. 12 at $144.73, with a market capitalization of $16.4 billion on trailing-year revenue of under $1 billion.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Subscriber Numbers CountFor investors, Roku has always been a game of Whose Line is it Anyway, the old game show. Everything's improvised and the numbers don't count.That's because, while Roku is a piece of technology, it's a very cheap one. Streaming dongles cost just $25 or so each. For Roku the key metrics have not been stick sales, but the number of accounts and platform revenue. In the third quarter these came in at 32.3 million and $179.3 million. The latter grew 79% from the previous year. * The 10 Worst Dividend Stocks of the Decade By comparison, Netflix (NASDAQ:NFLX) had 60.6 million paying U.S. members at the end of the third quarter. Amazon (NASDAQ:AMZN) has more than 100 million on its Prime plan, but that's free shipping, not just TV. Cloud companies like Amazon are unlikely bidders, because like Apple (NASDAQ:AAPL), they can build a Roku and its market share. Amazon already has.For all their bluster, AT&T (NYSE:T), Comcast (NASDAQ:CMCSA) and Disney (NYSE:DIS) are so far behind Roku and Netflix as to be out of sight. Disney bragged last month of having 10 million members, after putting Disney+ on sale at $6, and making it part of a bundle with Hulu and ESPN+ at Netflix's price. AT&T's HBO Now has 5 million subscribers. Comcast has yet to launch its free "Peacock" network to its cable subscribers. Who Might BidWhat Roku offers an acquirer is that 30 million membership figure, plus distribution in TV sets by Walmart (NYSE:WMT) and others. Walmart itself shouldn't be discounted as a possible buyer. Its Vudu service has yet to take flight -- it's been negotiating with other services to broker memberships.For any of these big players, Roku would be seat-cushion money at its current market cap. The only big streamer whose value puts it out of the running is ViacomCBS (NASDAQ:VIAC), with a market cap of $23.4 billion. Netflix is worth $130 billion, Comcast $190 billion, AT&T $280 billion and Walmart $339 billion.Roku has never put itself up for auction, but over 60% of the stock is held by institutions. The Bottom Line on RokuThe question, for an investor, becomes one of timing. When do you want to get in, how much loss do you wish to risk and what do you think the winning bid might be? Roku continues to act like a bid is not happening, recently paying $150 million for Dataxu, an advertising sales platform. But that just makes it more attractive.When Roku next reports earnings, analysts expect a loss of 14 cents per share on revenue of $391 million. That would be a doubling of the third quarter's revenue, because heavy sales of Roku-equipped TVs are expected under trees this month.My view on Roku is you buy it as a speculation on growth, but keep it for the inevitable take-out. Whatever its current valuation is where the bidding starts, not where it ends.Dana Blankenhorn is a financial and technology journalist. His latest book is Technology's Big Bang: Yesterday, Today and Tomorrow with Moore's Law , essays on technology available at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AAPL and AMZN. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Worst Dividend Stocks of the Decade * 7 Game-Changing Tech Stocks to Buy Now * 5 Chinese Stocks to Buy for the Big 2020 Rebound The post High-Growth Roku Will Make Excellent Takeover Target appeared first on InvestorPlace.
Disney+ downloads passed 22 million on mobile devices, the independently owned app-tracking company Apptopia announced Tuesday.
If you missed "Game of Thrones," or just want to watch the whole thing again, Roku Inc. (NASDAQ: ROKU) is giving you that chance. The Roku Channel will stream the first season of the "Game of Thrones" saga, along with several other shows and movies, between Dec. 26 and Jan. 1, the company said. In addition to "Game of Thrones," the company's second annual "Stream-a-thon," will also include some episodes from the HBO series "Barry," "Chernobyl," and "Succession," among others.
Roku, Inc. (Nasdaq: ROKU) today announced its second annual Stream-a-thon, a week during the holiday season dedicated to delivering a collection of top shows and premium TV to Roku® users for free. Viewers can enjoy a selection of unlocked premium content for free with no subscription needed on The Roku Channel, the home for both free and premium entertainment on the Roku platform. Starting today, Roku is expanding its Premium Subscriptions offering on The Roku Channel with a new HBO + Cinemax Value Pack, which is available to customers going forward for $20.99.
Target is the Yahoo Finance Company of the Year for 2019. We talk with Target's executive team and experts on how the retailer made it happen in 2019 and what's in store for 2020.
Reuniting Viacom and CBS has made their new stock attractive. Also, Wall Street analysts’ views on Annaly Capital Management, Roku, Denny’s, and Wyndham Hotels & Resorts.
Needham analyst Laura Martin, who is widely regarded as the most prominent bull on Roku stock, is now saying investors should buy digital ad company Trade Desk. (TTD) (TTD) provides ad buyers with a digital platform to create and manage their campaigns.
For stocks like Roku (NASDAQ:ROKU), growth has beaten valuation almost every time in this market. Whether it's ROKU stock, or Shopify (NYSE:SHOP), or (for the most part) the likes of Amazon.com (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX), investors have proven that they will pay almost any price for solid growth.Source: JHVEPhoto / Shutterstock.com And so, for the most part, investors who have worried about valuation have missed out on big gains. In some cases, they've lost a lot of money trying to short growth stocks.In that context, it's too simplistic to argue that a stock is "overvalued" based on a single fundamental metric. That's been true for a name like AMZN, and it's true for ROKU as well.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAfter all, it's not as if the market is unaware that Roku stock trades at roughly 16 times this year's revenue or that ROKU is unprofitable. In fact, it actually takes more due diligence to understand the bull thesis. That requires long-term modeling and a long-term focus.So I'm sympathetic to the bull case. ROKU has a real opportunity as new streaming services come online. It will be profitable at some point. Anyone who has bet against Roku stock so far has lost; ROKU stock price has nearly quintupled so far this year. * 7 Hot Stocks for 2020's Big Trends Even considering all that, however, I still think the shares are overvalued above $150, and they may be disastrously overvalued. The issue isn't necessarily that ROKU stock is expensive right now, but that the growth priced in by the current valuation may not materialize. The Case for Roku StockIn this market, a 16 revenue multiple doesn't seem that outrageous. Of course, that fact alone might concern investors who see tech, or even the market as a whole, as overvalued at the moment.But at least on a relative basis, ROKU's revenue multiple isn't necessarily out of line. SHOP stock is trading at 28 times this year's revenue, while Okta (NASDAQ:OKTA) has a price-revenue multiple of roughly 27, and Zoom Video Communications' (NASDAQ:ZM) multiple is closer to 40.And Roku's growth story can arguably match that of almost any other stock in the market. Its revenue should grow close to 50% this year, and analysts' average estimates suggest a 40%-plus increase in 2020. Both figures are roughly in line with that of SHOP, whose revenue multiple is substantially higher.From that perspective, the ROKU stock price isn't necessarily outrageous. In fact, it might even be cheap. The ROKU Stock Price is More Expensive Than It LooksBut there are two problems with those comparisons. The first is a point I've admittedly made in the past; not all of Roku's revenue is all that valuable. Its 2019 guidance suggests that roughly one-third of its revenue will come from Roku players. To be blunt, selling players is not a good business for ROKU.Over the past four quarters, gross profit for the player business has totaled only $20.7 million, or just 5.7% of the revenue from players. Over the same period, ROKU as a whole spent $214 million on R&D; a good chunk of that spending no doubt was used to enhance the players.And so it's clear that the player business loses a great deal of money. The player business is a loss leader for advertising and other sales, what Roku calls "platform revenue." So the player business and its revenue shouldn't be assigned much, if any, value. In fact, investors should assume that the player business will continue to lose money.Platform revenue is the important metric. And ROKU stock is valued at roughly 24 times that figure, based on its 2019 guidance. That's an enormous multiple which is more in-line with the market's most expensive stocks. And yet platform gross margins, which were 63% in the third quarter, are lower than those of several other high-growth software names (though, to be fair, they are higher than Shopify's gross margins.)That issue alone doesn't mean ROKU stock has to pull back; even valuing the stock based only on platform revenue, an investor still can make the case that a price above $150 is reasonable, if not likely. And it does seem like the stock has a path to at least fill the gap created on Monday, when the shares plunged after Morgan Stanley downgraded Roku stock.Still, ROKU is one of the most expensive stocks in the market. That alone suggests some very real risk. Are Competitors Coming?The second issue is that Roku has more, and more intense, competition than other stocks with similar valuations. Admittedly, Roku has achieved dominant market share against the likes of Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL), and Amazon.But its role as the primary gateway to streaming services is far from guaranteed. Comcast (NASDAQ:CMCSA) and other telecom companies can and will provide their own streaming boxes to existing internet customers. Amazon has partnered with TV manufacturers to install its Fire TV software; Roku has done the same, but a lack of new agreements with TV makers was one reason for Morgan Stanley's downgrade.So the argument that Roku is the primary play on new streaming services from Disney (NYSE:DIS), AT&T (NYSE:T), and Comcast itself seems too simplistic. Over time, the very need for a player is going to fade away as all screens come embedded with the necessary software. New delivery mechanisms may spring up. Roku isn't necessarily the next TiVo (NASDAQ:TIVO), but any hardware-based business is at risk of being disrupted.This is not to say that ROKU stock should be shorted or that its growth is going to come to a screeching halt in the next couple of years. Rather, Roku stock has one of the highest valuations in the market but has very real risks. That's the point that Morgan Stanley made this week -- and it's probably a good one. ROKU stock price suggests that the company's growth will last for years, and I'm simply not quite sure that will be the case.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Hot Stocks for 2020's Big Trends * 7 Lumbering Large-Cap Stocks to Avoid * 5 ETFs for Oodles of Monthly Dividends The post Roku Stock Simply Needs to Pull Back appeared first on InvestorPlace.
Shopify (NYSE:SHOP) is rallying again. Shopify stock has gained over 5% in each of the last two sessions and seems as if it might challenge all-time highs above $400 reached in August.Source: Beyond The Scene / Shutterstock.com At this point, the gains in Shopify stock seem almost ridiculous. Shares have more than tripled from their 52-week low. They've risen 170% so far this year. Only three of the 700-plus stocks with a market capitalization over $10 billion -- Roku (NASDAQ:ROKU), Sea Limited (NYSE:SE), and Carvana (NYSE:CVNA) -- have done better.And after those gains, the valuation, too, looks close to ridiculous. Based on guidance, SHOP stock trades at about 28x this year's revenue. More incredibly, it's valued at over 1,000x adjusted operating income. As a result, many investors, myself included, have expected Shopify stock to come back to Earth. It hasn't.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTo be fair, there is some support for the seeming nosebleed valuation, as I detailed in August. The revenue multiple is enormous, but so is Shopify's margin potential.Shopify's revenue only includes its fees -- not the total value of products and services sold through its platform. So while operating margins for Amazon.com's (NASDAQ:AMZN) retail business top out in the mid-single-digits, at scale Shopify's margins could easily exceed 20% or go even higher. That alone justifies a higher price to revenue multiple. * 7 Retail Stocks to Buy That Dominated Thanksgiving Shopping Meanwhile, earnings multiples are inflated by the fact that margins at the moment are exceedingly low: less than 2% this year, based on guidance. Fundamentally, SHOP stock isn't cheap, but it probably shouldn't be.That doesn't mean Shopify stock is without risk. In fact, coming out of the company's third quarter, there's one key risk that investors should watch closely. It might define how the stock trades from here. The Growth Driving SHOP Stock HigherShopify stock receives among the highest multiples in the market because Shopify offers one of the best growth stories in the market. Revenue grew 59% in 2018, clearing $1 billion for the first time. According to the company's outlook, it should rise another 45% this year.It's thus not surprising that SHOP stock is so dearly valued. That kind of growth at scale is going to get investor attention, and investor dollars. (AMZN stock is an excellent long-term example of that fact.) And so while it looked like SHOP's bubble had burst just a few weeks ago, shares look set to at least challenge this summer's highs.But it's worth considering how Shopify is driving that impressive growth. The answer is through more merchants, not necessarily more sales per merchant, and that might be a problem going forward. Revenue Per Merchant and Shopify StockAccording to its 40-F, Shopify's paid user count increased to 820,000 at the end of 2018 against 609,000 at Dec. 31, 2017, a 34.6% increase. Revenue increased 59% over that period, to $1.073 billion from $673 million the year before.Those two figures suggest that revenue per merchant increased by about 18% in 2018. In Q3, the company trumpeted the milestone of 1 million merchants on the platform, which suggests paid user growth this year should be in the high 20% range (25% growth would get the year-end figure to 1.025 million). With full-year revenue expected to increase by 45%, it seems likely that revenue per merchant will grow in the range of 13% year-over-year, roughly speaking.That seems like good news for Shopify. Not only is the company adding more merchants, but its existing merchants are creating more revenue -- and making more sales. GMV (gross merchandise value), which measures those sales, jumped 48% year-over-year in the third quarter, well above a likely ~30% increase in the number of merchants.But looking closer, it's not clear that Shopify's merchants are doing quite as well as that number suggests. For one, a portion of the per-merchant revenue increase is coming from higher subscription fees.Monthly Recurring Revenue (MRR) rose 37% in the third quarter, above the likely merchant growth rate Shopify doesn't break out exact user numbers in quarterly releases). In addition, merchants are using more platform features, whether it's Shopify Capital or Shopify Shipping.The most important factor, however, is that Shopify increasingly is adding larger merchants. Shopify Plus, which costs over $2,000 per month, drove 27% of MRR in Q3 against 24% the year before. It took a higher share of GMV as well, per the Q3 conference call. Bigger merchants unsurprisingly are driving more sales and more GMV. But what does that mean for existing, smaller users? The Same-Store QuestionWhat we don't know is how fast existing users are growing their sales on the Shopify platform. This was one of the points made by Citron Research in its ill-fated short of SHOP stock back in 2017.Citron argued that questionable sales tactics by affiliates were resulting in a significant number of low-quality users. Those users were being attracted by promises of something close to a "get rich scheme". Citron argued that the Federal Trade Commission would be forced to act, Shopify's user growth would decelerate, and Shopify stock would plunge.Obviously, those predictions have been wrong. But the underlying worry has a bit of validity looking at the numbers. We simply don't know how much organic growth -- something like the 'same-store' figures reported by traditional retailers -- Shopify users are generating.But what we can calculate doesn't look all that impressive. Again, revenue per merchant should increase by about 13% this year. MRR growth from higher subscription fees probably is worth a few points. The addition of larger Plus merchants, most of whom are selling products from established businesses, likely drives GMV and so-called "merchant solutions" revenue. So do the ancillary products.Indeed, as even one bullish analyst calculated after Q3 earnings, GMV per merchant has accelerated -- to 8% year-over-year. Some of that growth is coming simply from a higher mix of Plus customers. The average 'core' Shopify small business (or home business) user maybe is growing her sales 5% a year. The figure might be even lower.That growth comes amid a strong economy in the U.S., which drove about 70% of revenue in 2019. It's with a huge tailwind toward eCommerce as a whole. And it's in an environment where small, unique, and local continues to win over large, bland, and corporate. In that context, that growth might not be good enough. The Merchant Risk to Shopify StockIn a presentation earlier this year, Shopify estimated its total addressable market just in small and medium-sized businesses at $70 billion. With revenue at roughly $1.5 billion, there's seemingly a huge runway for years, if not decades, of further impressive growth.The $70 billion figure, according to the company, is based on an estimate of 47 million businesses worldwide. As noted, Shopify has a little over 1 million of those businesses as current customers.But if existing SMB customers are posting minimal growth, it's fair to ask if the opportunity really is that big. Certainly, Shopify's earlier customers are its best customers, with the most motivation to sell online and likely the best ideas. Capturing incremental merchants should get incrementally more difficult going forward.There's also the question of how those businesses will perform in a recession, as I detailed last year. Again, Shopify's merchants at the moment are operating in an exceedingly favorable environment. That will change at some point.That, in turn, creates an issue with SHOP stock at this valuation. Current multiples on both revenue and earnings are pricing in a tremendous amount of growth. But that growth, in turn, remains heavily reliant on attracting new merchants, much more so than better monetizing existing customers. So what happens if merchant growth slows? The Bottom Line on Shopify StockShopify has levers to pull relative to getting more revenue from existing customers, whether raising prices (as platform play Etsy (NASDAQ:ETSY) did so successfully ) or adding services like Shopify Fulfillment. Still, this is a valuation that assumes that merchant growth is going to continue at a 20% or 25% rate for several years to come.There's a possibility that it won't. An economic downturn would hit that growth. If existing merchants aren't doing that well, new potential users may not follow.To be sure, SHOP bulls can, and likely do, see it differently. It's that enormous addressable market that underpins the bullish outlook for Shopify as a potentially legitimate rival to Amazon. (It is the "anti-Amazon", as some have noted.) International markets admittedly provide a huge opportunity even if U.S. customer acquisition slows.Still, there's a risk here which highlights the problem with Shopify stock here. It remains priced for perfection. As seen in the 25% slide that began in September, it doesn't even really take much in the way of news for shares to stumble. Any real long-term change in expectations would have a deleterious impact on SHOP's fair value.And those expectations still seem to include a path for the number of merchants to double in the next 4-5 years. It's possible they will; Shopify offers an impressive platform with real value. But if existing merchants aren't doing quite as well as headline numbers suggest, it's at least fair to wonder how many businesses will rush to join them, and for how long.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Retail Stocks to Buy That Dominated Thanksgiving Shopping * 6 Manufacturing Stocks to Buy as the Economy Recovers * The 7 Best Cryptocurrencies to Buy as Blockchain Heats Up The post With Merchant Growth Slowing, Shopify Stock Is Priced for Perfection appeared first on InvestorPlace.
One phrase comes to mind when you think of hedge fund Two Sigma: quantitative powerhouse. Founded in 2001 by John Overdeck and David Siegel, the hedge fund startup has become a $60 billion quant shop that uses a technology-based approach to guide its investing strategy. Its innovative use of fields like machine learning and distributed computing has enticed a host of blue-chip clients as well as first-rate talent.Based on the $15.2 billion net gain generated for its investors in the last 18 years, Two Sigma earned a spot on LCH Investments’ annual list of the most successful hedge funds of all time. No wonder the Street’s focus locks in on Overdeck and Siegel when the fund makes a portfolio addition.Bearing this in mind, we wanted to take a closer look at 3 trending stocks the fund added to its basket of holdings. With the help of TipRanks’ Stock Screener tool, we discovered that all of these names are buy-rated and boast substantial upside potential (depends who you ask) from the current share price. Here’s the lowdown:Roku Inc. (ROKU)For those just tuning in to Roku now, the streaming player company has captured Wall Street’s attention with its massive 372% climb year-to-date. While some bears have pointed to the recent dip as a cause for concern, the bulls believe that Roku is charging full speed ahead.With this in mind, Two Sigma has initiated position in ROKU, snapping up 177,100 shares in Q3. This puts the value of the purchase at more than $18 million.Needham analyst Laura Martin cites accelerating subscription video on demand revenues as the key upside valuation driver for Roku in 2020, noting that this actually decreases the investment risk. Roku is the largest aggregator of ad-driven TV and film content, with Martin estimating it will report about $850 million of total advertising revenue in 2020.“The enormous amount of money at stake (ie, $70B/year vs the tiny amount OTT TV and film ad inventory) and the growing inability of brands to follow viewing behind a growing number of SVOD pay walls makes OTT ad units more valuable, especially the young wealthy viewers who are more likely to view streaming content,” the analyst explained.On top of this, Martin sees Roku as the primary beneficiary of new streaming services from Disney+, Apple+, Peacock/CMSCA and HBOMax/AT&T thanks to the 32 million U.S. connected-TV homes that make up its installed base. Based on all of the above, the five-star analyst kept her Buy rating, while boosting the price target to $200 (from $150). At this target, shares could rise 38% in the next twelve months. (To watch Martin’s track record, click here)Like Martin, Macquarie’s Tim Nollen has high hopes for Roku. “We believe connected TV (CTV) device usage and advertising growth will continue to rise exponentially, and Roku is in prime position to both drive and harness this,” he wrote in a note in which he maintained his bullish call and bumped up the price target to $170. (To watch Nollen’s track record, click here)Looking at the consensus breakdown, not everyone on the Street is on the same page as the analysts. The average 12-month price target on the stock stands at $148, which implies a modest 2% increase from its current price. This is based on 9 "buy," 2 "hold," and 2 "sell" ratings received in the last three months. (See Roku stock analysis on TipRanks)Facebook (FB)Overdeck and Siegel’s fund just upped the ante by snapping up 1,306,250 shares of Facebook with a value of over $232.6 million, increasing the holding by a whopping 711%.Indeed, when it comes to the social media giant, some analysts tell investors the outlook for 2020 plus the current attractive share price equals a Buy.Part of the bullish sentiment on Wall Street comes as a result of its advertising segment. In its third quarter, FB’s ad growth remained at more than 30%, with 2020 guidance landing in-line with investors’ expectations. Susquehanna’s Shyam Patil thinks that this target is achievable or even beatable as Instagram Stories monetization continues to scale and incremental growth drivers like Instagram Shopping as well as Explore begin to accelerate. The analyst puts his rating where his mouth is, reiterating a Positive rating alongside a price target of $245. (To watch Patil’s track record, click here)Like Patil, Morgan Stanley’s Brian Nowak is especially excited about user engagement as it creates a “layer cake of monetization."“Engagement creates monetization opportunities and FB continues to excel at innovative monetization. Looking ahead to ’20 and beyond, we remain bullish about the still untapped engagement/use cases to monetize including Instagram Explore, commerce across FB Marketplace and Instagram, product sponsorships, video and Instagram TV…and (over the long-term) messaging,” he explained. To this end, Nowak decided to stay with the bulls. According to the five-star analyst’s $250 price target, shares could surge 26% in the next twelve months. (To watch Nowak’s track record, click here)In general, other Wall Street analysts take a similar approach. With 28 Buys, 3 Holds and 1 Sell, the verdict is that Facebook is a Strong Buy. Its $236 average price target implies a potential twelve-month gain of 19%. (See Facebook stock analysis on TipRanks)Snap Inc. (SNAP)The company behind the famous photo-sharing app has certainly impressed Wall Street with its 171% year-to-date gain. Despite less than ideal user growth in the U.S., some analysts argue that this is nothing to get scared about.With this background, Two Sigma just scooped up a chunk of Snap shares. We’re talking about a total of 5,528,277 or $87.3 million-worth.Kevin Rippey, an Evercore ISI analyst, reminds investors that revenue growth accelerated for the third quarter in a row to 50% year-over-year and losses narrowed to less than $50 million on an adjusted EBITDA basis. While acknowledging that the 1 million quarter-over-quarter U.S. user growth most likely drove the post market selloff, he claims that management’s guidance still reflects ongoing momentum in audience trends. This prompted the analyst to comment, “We’re a bit surprised to not see more initial enthusiasm given aggregate user trends and guidance, as it’s increasingly clear that the accelerative dynamics in SNAP’s business are sustainable.” As a result, Rippey's Outperform rating and $20 price target on Snap stock remain unchanged. (To watch Rippey’s track record, click here)Another Snap bull, Guggenheim’s Michael Morris, thinks that Snap has what it takes to further monetize its core platform: "We also have confidence that Snap will continue to monetize its core platform while creating incremental pathways to scale revenue and complement the user experience – particularly given untapped revenue opportunities within AR, Maps, and Games." Morris adds that Snap’s “unique scale among valuable younger audiences," lends itself to a foundation for sustained equity appreciation. To this end, the four-star analyst maintained his bullish thesis and $22 price target, bringing the upside potential to 47%. (To watch Morris’ track record, click here)In terms of Snap’s Street consensus, analysts are split almost right down the middle. Out of 21 total analyst ratings published in the last three months, the Buys beat out the Holds by just 1, making the consensus a Moderate Buy. In addition, the average price target of $19 amounts to 26% upside potential. (See Snap stock analysis on TipRanks)
Although the S&P 500 index futures were in the red at the top of the show, co-host Dennis Dick insisted they weren't red enough. On this occasion, stocks didn't rally during the broadcast and the index shaved nearly 30 handles from the start of the show until it found buyers 20 minutes into the session. Where To Hide? For example, when growth stocks fall out of favor, investors may turn to value stocks to employ a more conservative approach.
A day after Morgan Stanley downgraded Roku’s stock, Needham’s Laura Martin reaffirmed her Buy rating, predicting strong growth for the third-party streaming services on its platform.
Roku Inc. shares are up 6% in Tuesday morning trading after Needham analyst Laura Martin raised her price target on the stock to $200 from $150. The new target is the highest listed on FactSet. Needham's increased optimism comes a day after Roku shares plunged 15% following a downgrade to underweight from Morgan Stanley. Martin recommends buying the dip on Roku and is upbeat about the company's potential to benefit from the launch of new streaming services, including from AT&T Inc. and Comcast Corp. . "In 2020, Roku's key upside valuation driver will be accelerating subscription [streaming-video-on-demand] revenues, which lowers investment risk, we believe," she wrote. "Additionally, Disney+, Apple+, Peacock/CMCSA and HBOMax/AT&T should accelerate customer acquisition spending, and Roku is a key beneficiary owing to its installed base of 32 million US connected-TV homes." She kept a buy rating on the stock, which has surged 373% so far this year, as the S&P 500 has increased 23%.
(Bloomberg) -- Roku Inc.’s price target was raised to a Street-high view of $200 from $150 at Needham, which called the company “a key beneficiary” of the shift toward streaming video.The higher target comes just one day after Morgan Stanley downgraded the stock to the equivalent of a sell, warning about growth and valuation following steep 2019 gains. The downgrade sparked a 15% decline in Monday’s session, but Needham urged investors to “buy on dips.”Shares of the company gained 4.5% in early trading on Tuesday. While the stock has been a massive outperformer thus far this year -- having risen more than 340% -- recent moves have been volatile. It is up nearly 40% from a September low, but down 15% from a peak hit last week.The 2019 gains have been largely driven by the massive growth in the streaming-video space, which Roku has capitalized on by being a neutral platform for content companies. Needham, which reiterated its buy rating on the company, expects this trend to continue next year.“In 2020, Roku’s key upside valuation driver will be accelerating subscription SVOD revenues, which lowers investment risk,” analyst Laura Martin wrote to clients, referring to streaming video on demand. She noted the growing competition in the streaming-video space; in addition to Netflix, Walt Disney and Apple, there are soon-to-be-released services from Comcast and AT&T.Just as YouTube is “the winning aggregator of user-generated videos,” she wrote, “Roku will be the winning aggregator of TV and films.”(Updates stock to market open in third paragraph.)To contact the reporter on this story: Ryan Vlastelica in New York at email@example.comTo contact the editors responsible for this story: Catherine Larkin at firstname.lastname@example.org, Steven Fromm, Janet FreundFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Roku Inc (NASDAQ: ROKU ) slipped 15% Monday on a Morgan Stanley downgrade . The scenario presented a fortunate buy opportunity for one market expert. The Rating Needham analyst Laura Martin maintained ...
We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds' top 3 stock picks returned 41.7% this year and beat […]
(Bloomberg Opinion) -- You’ve just witnessed the semi-annual Roku Inc. sell-off. It’s the time of year when investors come to the abrupt realization that they’ve probably paid too much to own shares of the high-flying streaming-TV company, as if valuing anything at 300 times Ebitda were ever rational. Here’s how it usually goes down: An equity analyst downgrades Roku, sending the stock into a tailspin, which leaves onlookers wondering what terribly bad thing occurred at the company — or what a Roku even is. This time, that analyst was Benjamin Swinburne of Morgan Stanley. He cut his rating to the equivalent of a “sell,” and oh, did the market listen: Roku plunged 15% on Monday for one of the Nasdaq’s worst post-Thanksgiving showings.But what changed the last few days between carving the turkey and putting up the Christmas tree? Nothing, really. In fact, Roku’s stock price is still up 344% for the year, and it’s still the most popular streaming-TV device. As of last week, the company was valued at a whopping 322 times analysts’ forward 12-month Ebitda forecasts. Swinburne’s report explained that while Roku’s strategy is sound, its sky-high valuation is unjustified given that revenue growth is projected to slow.When several other analysts gave a similar word of caution in April, it sparked a sell-off then, too. But just as I noted at the time, it’s not that Roku’s business prospects were suddenly and dramatically altered; it’s more a function of an overheated stock price. If you think a perpetual cash-burner like Netflix Inc. is pricey, keep in mind that Roku’s own Ebitda multiple is still almost 10 times higher, even after Monday’s drop:Part of the problem is that in the bewildering market for streaming-TV services, it’s difficult to grasp what Roku does and to hedge what its role will be in the streaming wars. And certainly the $1.7 billion of short interest in Roku shares (per S3 Partners data) adds a degree of pressure to its trading price.Roku is fighting the giants of the streaming world on two fronts. It sells hardware and provides software that’s pre-installed on certain television sets, all of which allow users to access their video-app subscriptions, such as Netflix, Disney+ and CBS All Access in one place. Roku is also competing for advertising dollars through the ad-supported Roku Channel, which is less of a channel in the traditional cable-TV sense and more of a hodgepodge of free movies and shows for cord-cutters looking to save money. Roku devices accounted for 44% of all connected-TV viewing hours in the latest quarter, while Amazon.com Inc.’s Fire TV is in a distant second place with a 20% share, according to Conviva, an industry analytics firm. That’s a strong lead, but competition will intensify. The next frontier in streaming is offering bundles that help solve the consumer pain point of needing to pay for multiple apps individually. Eventually, users will gravitate to platforms with this capability. Comcast Corp.’s Flex platform, I argued last month, may be a step toward bundling streaming services in the way the cable giant packages traditional TV channels and its other services. Apple Inc.’s Apple TV Channels already allows users to subscribe to select apps on an a-la-carte basis through their Apple IDs. But the warnings about the growth outlook require a bit of context: We’re talking about a business that increased revenue by 50% in the third quarter and is projected to do so again this quarter. A slowdown from that level would still be a dream for many corporations its size. “Roku reported a strong quarter for just about any company but Roku,” is how Alan Gould, an analyst for Loop Capital Markets, put it in a note to clients last month. Roku also added 1.7 million active accounts — that’s almost the same number of people who quit traditional pay-TV services such as Comcast’s Xfinity, AT&T Inc.’s DirecTV and Charter Communications Inc.’s Spectrum in the same period. And if Roku’s $16 billion market value shrank enough, an acquirer might just swoop in for the company and all those users and TV-manufacturer relationships.So things aren’t quite as bad for Roku as one might infer from Monday’s plunge. They really aren’t bad at all. But Roku’s the small fry in a land of giants, and even if it doesn’t get trampled, its lavish stock price will keep taking hits.To contact the author of this story: Tara Lachapelle at email@example.comTo contact the editor responsible for this story: Beth Williams at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Markets were hit hard in early Monday trading, as trade tensions spooked investors. Let's look at a few top stock trades as we enter the last trading month of 2019. Top Stock Trades for Tomorrow No. 1: Roku (ROKU)Source: Chart courtesy of StockCharts.comRoku (NASDAQ:ROKU) was down around 7% in pre-market trading thanks to a negative analyst note from Morgan Stanley. At 8 a.m. ET, not many were expecting the stock to be down 17% a few hours later.But that's exactly what we had, before shares erased some of those gains. While Roku was hammered on a day where the rest of the market was under pressure too, a 17% beating is not really a fair response given that nothing actually changed with the company.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSo how do we trade it?The decline all but solidified $170 as resistance, but support came into play where it needed to. The 50-day moving average is near $132, while the 100-day is at $130. Not many expected Roku to go from $160 to $132-and-change in one day, but with Monday's bounce, support is doing its job. * 7 Entertainment Stocks to Buy to Escape Holiday Blues Below $130, though, the $116 to $120 area could be in the cards. Otherwise, let's see if Roku can fill some of this gap. Top Stock Trades for Tomorrow No. 2: Gogo (GOGO)Source: Chart courtesy of StockCharts.comOn tough market days, I love to look for the stocks showing relative strength. Unlike many in the market, Gogo (NASDAQ:GOGO) was positive throughout the session.On Friday, the 200-day moving average held as support, along with channel support (blue line). On Monday, the stock reclaimed the 100-day moving average. Now, bulls need to see the stock hold the $5.25 level and continue higher.If it does, look to see if Gogo can reclaim the 50-day moving average. Above puts $6-plus on the table and a possible retest of channel resistance. If it doesn't, $5 is back on the table. Top Stock Trades for Tomorrow No. 3: Bank of America (BAC)Source: Chart courtesy of StockCharts.comLike Gogo, Bank of America (NYSE:BAC) also displayed relative strength on Monday. In fact, BofA hit a new 52-week high.I have been waiting -- AKA hoping -- for a pullback in BAC stock, as its Q4 breakout has been very impressive. The stock continues to do an excellent job holding onto its recent gains, something many traders have surely noticed.$33 was resistance last week, but holding above it now puts $34-plus on the table. If it falls below $33, let's see if uptrend support and the 20-day moving average can buoy the name.If not, see if buyers step in around $32. Dropping below there could put the 50-day moving average on watch. If we get a real correction in the market, a retest of $30.50 to $31 would be attractive in BAC. Top Stock Trades for Tomorrow No. 4: Bristol-Myers Squibb (BMY)Source: Chart courtesy of StockCharts.comNot to beat the relative-strength theme to death, but Bristol-Myers Squibb (NYSE:BMY) was also on display Monday. Channel support (blue line) held throughout last week, and shares are now trying to push through $58.From here, the setup is straightforward. Either BMY reclaims $58 or it doesn't.If it does, it puts the 52-week high of $59.17 on the table, with channel resistance being the upside target above that. If Bristol-Myers can't reclaim $58, then channel support will again be called on. Should it fail, see if buyers step in near $55 again, while the 50-day moving average should act as support as well.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long GOGO and ROKU. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Things to Watch for into 2020 for Safer Income & Growth * 7 Entertainment Stocks to Buy to Escape Holiday Blues * 5 "Strong Buy" Biotech Stocks With More Than 80% Upside The post 4 Top Stock Trades for Tuesday: ROKU, GOGO, BAC, BMY appeared first on InvestorPlace.
When your holiday shopping is full of high-tech requests, it's not hard to imagine your wallet taking a beating. However, no-one wants to be dealing with a post-holiday financial hangover in January, when those credit card bills start arriving. * 10 Buy-and-Hold Stocks to Own Forever To help you stay within budget, we've put together a list of 10 great tech gifts, each of which costs less than $100.InvestorPlace - Stock Market News, Stock Advice & Trading Tips 10 Great Tech Gifts to Buy for Under $100: 1More Stylish True Wireless In-Ear HeadphonesSource: 1More True wireless earbuds are a hot gift category, thanks in no small part to the success of Apple's (NASDAQ:AAPL) AirPods.You can get great audio, excellent battery life and a comfortable fit from 1More's Stylish true wireless in-ear headphones. I reviewed these buds earlier this year and for under $100, they are a good value. With up to 6.5 hours of use on a charge (24 hours total including the charge case), they go for longer without needing to be recharged than AirPods, and 1More offers them in a choice of colors: black, gold, mint green and pink. Amazon Kindle Fire HD8 TabletSource: Amazon You are not going to get a cutting edge tablet for under $100. But you can get a pretty decent one in Amazon's (NASDAQ:AMZN) Fire HD 8. The 16GB version is priced at $94.99, or $79.99 with special offers (advertising). * 10 of the Best Stocks to Buy Right Now From the JUST 100 List For that price you get a tablet that's easily held in one hand, with an 8-inch HD display, quad-core processor, 10-hour battery life and integrated hands-free Alexa. You don't have access to anywhere near the selection of apps available from Apple's App Store or Alphabet's (NASDAQ:GOOG, NASAQ:GOOGL) Google Play, but there are still thousands to choose from through Amazon. And the Kindle Fire HD8 works perfectly well for web browsing, streaming video and reading e-books. Google Nest MiniSource: Google The $49 Google Nest Mini is a great, affordable option if you want to give someone a smart speaker. Use Google Assistant voice commands from across the room to control streaming music, control compatible smart home devices or to ask for the weather forecast. The second generation Nest Mini has improved bass for better music playback, improved voice recognition and it can easily be wall-mounted. Its recycled fabric cover is available in a selection of colors, so it can match pretty much any home decor. Mujjo Double-Insulated Touchscreen GlovesSource: Mujjo Do you know someone who uses their smartphone a lot, and lives in an area where the winters get really cold? * 7 Things to Watch for into 2020 for Safer Income & Growth Mujjo's double-insulated touchscreen gloves are the warmest I've ever used, thanks to multiple layers of Micro Fleece, Thinsulate and a wind-resistant Micro Pique outer shell. They're very smartphone friendly with sticky Silicone grip lines and a conductive treatment that makes virtually all surfaces -- including the thumbs and palm -- able to operate a touchscreen. You can pick up a pair for about $55. ROKU Streaming Stick+Source: Roku If someone on your list would like to access streaming video services but their TV lacks built-in support, then the ROKU (NASDAQ:ROKU) Streaming Stick+ makes a great gift.Just plug the $49.99 stick into an HDMI port and connect it to Wi-Fi for access to ROKU's extensive channels, including Apple TV+, Netflix (NASDAQ:NFLX) and Disney's (NYSE:DIS) new Disney+ service. The Streaming Stick+ supports resolution up to 4K, as well as HDR. It also includes a physical remote control, with built-in voice search capability. Apple Arcade SubscriptionSource: Apple If there's a gamer on your shopping list and they use Apple gear -- an iPhone, iPad, Mac or Apple TV -- a subscription to Apple Arcade would likely be very well received. * 7 5G Stocks to Buy Now for the Future Apple Arcade has over 100 premium games, with no ads, and no in-app purchases required. If you choose a family subscription, up to six people get access. Apple Arcade costs just $4.99 per month, so a year of gaming comes in at under $60. Sega Genesis MiniSource: Sega Even with the PS4 and Xbox One due for replacement next year, game consoles are still relatively expensive.However, for just $79.99 you can pick up the Sega Genesis Mini. This 16-bit retro gaming console comes with two wired controllers and an HDMI cable for plug and play setup. It features 40 built-in classic Sega Genesis video game titles, including Golden Axe, Sonic the Hedgehog and Altered Beast. Anker PowerCore+ 20100 USB-CSource: Anker Anyone who's into tech can use a good power bank. There's nothing worse than having a battery run low and having to hobble along in power saving mode. * 10 of the Best Stocks to Buy Right Now From the JUST 100 List Anker has a reputation for making some of the best power banks, with premium quality and a lot of features for the money. The $69.99 Anker PowerCore+ 20100 USB-C has a big 21000mAh Lithium-Ion battery. That's enough to charge an iPhone XR five times, yet it's still within FAA regulations for bringing on an airplane. It also has USB-C output for the power to charge tablets and even a MacBook. Amazon Smart PlugSource: Amazon With a $24.99 Amazon Smart Plug, just about any device or small appliance gets "smart." When you plug something into the Amazon Smart Plug (like a desk lamp, for example) instead of directly into an electrical outlet, it can be turned on and off using Alexa voice control. It can also be programmed to turn on and off on a schedule. All that's needed is an Alexa-enabled device such as an Echo smart speaker, or the Alexa app on a smartphone. BioLite HeadLamp 330Source: BioLite BioLite is a very cool company that makes interesting high-tech gear like the CampStove that burns twigs to produce heat and generate power to recharge mobile devices. * 7 Entertainment Stocks to Buy to Escape Holiday Blues The $49.95 HeadLamp 330 is the company's high-tech take on the headband flashlight, and it makes a great gift -- even for someone who isn't specifically hoping for tech gifts. The lightweight, rechargeable HeadLamp 330 is very comfortable, sits flush against the forehead, can be adjusted to multiple angles and two brightness levels, and it goes for up to 40 hours on a charge. The HeadLamp 330 also comes in interesting colors, including Sunrise Yellow. As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Things to Watch for into 2020 for Safer Income & Growth * 7 Entertainment Stocks to Buy to Escape Holiday Blues * 5 "Strong Buy" Biotech Stocks With More Than 80% Upside The post 10 Great Tech Gifts to Buy for Under $100 appeared first on InvestorPlace.
Roku Inc's high-flying stock tumbled 15% on Monday after Morgan Stanley downgraded the video streaming company, warning that revenue and profit growth could slow next year. A major winner in the consumer shift away from cable television in favor of Netflix and other streaming services, Roku's stock has gained more than 300% in 2019, even after Monday's slump.