|Bid||147.50 x 800|
|Ask||147.59 x 800|
|Day's Range||143.10 - 148.70|
|52 Week Range||26.30 - 176.55|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Earnings Date||Nov 5, 2019 - Nov 11, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||129.67|
Investing.com – Netflix (NASDAQ:NFLX) climbed higher on Friday after Piper Jaffray backed the streaming giant to continue its dominance, even as rivals eye a piece of the pie.
In a week that was otherwise light on market news, Apple (NASDAQ:AAPL) lit a fire under large-cap tech stocks Tuesday with its livestream. This Apple event is the annual ritual where Tim Cook dons the traditional dark sweater, gets onstage at the "Steve Jobs Theater," and presents the new product lineup.We saw the new hardware: the Apple Watch Series 5…the 7th generation iPad…and of course the iPhone 11, now with two or even three rear cameras!But Apple also had a little surprise for its competitors in the streaming media market:InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe new Apple TV+ will launch Nov. 1, two weeks before Disney+…and it will be quite affordable. At $4.99 per month, it'll undercut everyone on price.This was a direct shot at Netflix (NASDAQ:NFLX), which starts at $8.99 per month these days, and The Walt Disney Co (NYSE:DIS), which currently charges $5.99 per month for Hulu and will offer Disney+ for $6.99. (Or you can get it bundled with ESPN+ and Hulu Original for $12.99 per month.) * 10 Battered Tech Stocks to Buy Now This is a pretty aggressive strategy to help Apple TV+ compete in a well-established space where Netflix (for example) already has over 150 million subscribers and nearly 1,800 TV shows and 4,000 movies.Judging by the market reaction to the Apple event, Apple TV+ is a contender. On an otherwise flat trading day, AAPL stock gained 1.2%, while NFLX, DIS and especially Roku (NASDAQ:ROKU) sold off hard. Below you can see how things played out after the livestream of the Apple event began at 1 p.m. EST:Investors were perhaps wise to be selling DIS. Sure, sales are growing - and perhaps Disney+ preorders are helping, along with major moneymakers like "Avengers: Endgame." But operating margins certainly aren't. Disney's earnings stats are dismal as well, with analysts revising their projections lower. Here is the full Report Card for DIS from my Portfolio Grader:Netflix's advantage over the likes of Disney is that (like Apple) it is an innovator. It totally disrupted its market with a game-changing product, and today it invests heavily in original content. Meanwhile, Walt Disney Pictures is just churning out remake after remake. At Accelerated Profits we went with NFLX stock and cashed out a 122% profit, regardless of Disney+.The media market has become ultra-competitive, and the innovators will win out. Ultimately, as I've made clear in Growth Investor, we're a consumer-driven economy - and today's consumers want unique, high-quality content.It's telling that the reaction to the Apple event had more to do with content services than hardware: The new iPhone 11 with its slow-motion selfies ("slofies") got little fanfare, and ROKU stock has been outright rejected since Tuesday.Now, Roku still has the lead, similar to how Netflix got a big lead from being installed on new TVs. But I think Apple TV will succeed in capturing market share and take the 2 spot. Apple fanatics can now forego the Roku media player - but still get that same convenience: They can get a year of Apple TV+ for free by buying an Apple TV (or any other) device…and they can stream Apple TV+ on their phones.In fact, Apple has been transitioning its focus from Products to Services for quite some time.While iPhone is still its largest sales category, Apple's Services segment contributes roughly twice as much as the wearables, the Macs and even the iPads. Naturally, Apple wants to keep that gravy train rolling by offering Apple TV+ to boost revenue further (and make earnings more predictable). Services is already what's driving Apple's revenue growth.Even Apple's latest major innovation - the Apple Watch - may soon become a vehicle for this trend…if Tuesday's livestream is any indication. The Other Key Takeaway from The Big Apple EventThe hardware on the Apple Watch is pretty impressive. With last year's Series 4, Apple added a heart sensor that lets you take your own electrocardiogram (ECG/EKG); the Apple Watch will automatically notify you if there's anything unusual. Now with the Series 5, there's an always-on display - which you can see from almost any angle - and a built-in compass. The Apple Watch can place an emergency call for you in 150 countries, now, too.But most of the focus with the Apple Watch was on your quality of life. In this year's livestream Apple event, the presentation of the iPhone 11 was all about what it can do. But with the Apple Watch, it was what it can do for you.Tim Cook kicked it off with testimonial videos: We heard from an elderly man whose Apple Watch automatically dialed 911 (and his wife) during a heart attack…plus stories from young parents, in which their EKG readings and the Watch's baby-monitor app featured prominently.In this shot from the presentation, you see it's all about the apps as well:Source: Apple Special Event September 10, 2019 Now that you can track just about anything for your health… what Apple is really selling you here is your own data.From workouts to your sleep cycles, reproductive health, and even meditation, the amount of data these wearables can collect is staggering. And to fulfill their potential, the apps need "the mother of all technologies."Up until now, technologies have certainly made our lives easier and more efficient…but with a lot of room for human error. People trip over cords, spill their coffee, and get tired.Artificial intelligence (A.I.) does not.If A.I. sounds futuristic, well then, the future is already here. If you use apps like Netflix, TurboTax, QuickBooks, Zillow (NASDAQ:Z), or even an email spam filter, then A.I. is already helping your day run more smoothly and efficiently. And as scientists find even more applications for artificial intelligence - from healthcare to retail to self-driving cars - it's incredible to imagine how much data will be involved.To create A.I. programs in the first place, tech companies must collect vast amounts of data on human decisions. Data is what powers every A.I. system.So any one company that can help with customers' data issues - is the one company that's most worth investing in.You don't need to be an A.I. expert to take part. I'll tell you everything you need to know, as well as my buy recommendation, in Growth Investor. My 1 stock for the A.I. trend is still under my buy limit price -- so you'll want to sign up now; that way, you can get in while you can still do so cheaply.Click here for a free briefing on this groundbreaking innovation.Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system -- with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the "Master Key" to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post Apple Event: New Offerings Leverage the Little-Known Future of Tech appeared first on InvestorPlace.
The entertainment streaming wars are heating up fast. Apple Inc. (AAPL), one of the world's largest companies with $1 trillion in market value, has operated largely on the fringes of the movie and TV streaming industry. Apple raised eyebrows on Wall Street and the industry this week, according to Bloomberg, when the company said its streaming video service will debut at a subscription price of $4.99 per month, which undercuts by as much as 60% monthly prices offered by rivals including (NFLX), Amazon.com Inc. (AMZN), and The Walt Disney Company (DIS).
U.S. stock futures are trading higher this morning in what looks to be a quiet open for the market. Ahead of the bell, futures on the Dow Jones Industrial Average are up 0.17% and S&P 500 futures are higher by 0.13%. Nasdaq-100 futures have added 0.17%.Source: Shutterstock In the options pits, call volume saw a modest uptick, helping to drive overall volume above average levels. Specifically, about 21.7 million calls and 17.9 million puts changed hands on the session.At the CBOE, the single-session equity put/call volume ratio rose to 0.65 -- a one-week high, and the dead center of its 2019 range. The 10-day moving average held its ground at 0.65.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOptions traders swarmed in Ford (NYSE:F),Visa (NYSE:V) and Roku (NASDAQ:ROKU) among others. Below we'll explore the catalysts and investigate their price action. Ford Motors (F)Volatility seized Ford shares yesterday after the automaker saw its credit downgraded to junk by Moody's. The ratings agency believes Ford sits in a poor financial position for its multi-billion dollar restructuring. Traders viewed the stock's large down gap as a buying opportunity, however.Initially, the company saw its shares open down 5%, but bulls swarmed to pare the losses to just 1.26% by day's end. Trading volumes surged to over 70 million shares for the session, marking the highest volume day since late-July. The price trend of Ford stock leaves much to be desired. It rests below its 50-day moving average but above the 20-day and 200-day. The mixed messages suggests neutrality more than anything. * 10 Healthcare Stocks to Buy Despite the Headlines While the trend gives traders little to latch on to, the beefy 6.37% dividend is likely sufficient to keep income seekers targeting the stock for the foreseeable future.On the options trading front, calls slightly outpaced puts on the day. Activity swelled to 335% of the average daily volume, with 145,384 total contracts traded. The increased demand drove implied volatility up to 34%, placing it at the 24th percentile of its one-year range. Premiums are now pricing in daily moves of 20 cents or 2.1%. Visa (V)Credit card stocks have not fared well over the past two sessions. Visa has fallen almost 6% from Monday's intraday high on above-average volume. Yesterday's whack pushed V stock back below its 50-day moving average. Normally that kind of breach would question a stock's uptrend, but Visa has seen multiple probes below the 50-day during its trend and few have actually mattered.Bottom line: this is probably a dip worth buying.On the options trading front, speculators favored calls throughout the session. Total activity jumped to 220% of the average daily volume, with 114,740 contracts traded. Calls claimed 53% of the take.Implied volatility cruised higher to 23% and now sits at the 27th percentile of its one-year range. Premiums are baking in daily moves of $2.57 or 1.5% so set your expectations accordingly. Roku (ROKU)Roku stock is finally receiving its comeuppance. Monday's wicked bearish engulfing candle marked a short-term top and yesterday's epic plunge confirmed the easy money in its upswing is over. ROKU stock has fallen 18.4% over the past two days.The action reminds me of the old trading adage, "bulls make money, bears make money, pigs get slaughtered." Roku's ascent had long since left the stratosphere and was well on its way to the moon when profit-taking and the inevitable pullback commenced. And, like so many gravity-defying rallies before it, Roku learned that gravity always wins in the end. * 7 Upcoming IPOs for September On a positive note, because ROKU had risen so far off of support and its major moving averages, this pullback hasn't broken any critical support levels. With its overall trend still pointing higher, it might just need a reset or time of rest before eventually moving higher.On the options trading front activity pushed to 218% of the average daily volume, with 309,379 total contracts traded. Calls barely inched out puts driving 51% of the session's sum.Implied volatility rallied to 66%, placing it at the 32nd percentile of its one-year range. Selling bull puts is the way to go if you're in the mood for buying the dip.As of this writing, Tyler Craig held bullish options positions in Roku. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Wednesday's Vital Data: Ford, Visa and Roku appeared first on InvestorPlace.
One of the most surprising elements of Apple Inc.’s September iPhone launch was its aggressive pricing on many products, especially its new streaming service.
All eyes were on Apple (NASDAQ:AAPL) for its streaming announcements, as well as new iPhones, iPads and Apple Watch upgrades. The implications go further than just Apple and the holiday season though. Let's use this opportunity to look at a few top stock trades. Top Stock Trades for Tomorrow 1: AppleApple announced a lot of exciting updates for its customers, one of which is streaming video. That dealt a blow to other names in the streaming space that I want to look at more closely in a minute.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Best Stocks That Crushed It This Earnings Season For Apple, the stock is setting up in an ascending triangle pattern. That's a bullish technical development where rising support squeezes shares up against a static level of resistance.In this case, resistance comes into play near $215. A sell-the-news event could cause this setup to break down. But a close over $215 could trigger a move up to the July highs near $220. Over that and $230+ is in the picture, with the all-time highs not far above that.Below uptrend support and I want the 50-day moving average to act as support. Top Stock Trades for Tomorrow 2: DisneyAfter years of stagnation, Disney (NYSE:DIS) stock erupted in April. In just a few months, the stock went from $106 in March to almost $150 in July. The company is doing well, although shares fell almost 3% once Apple announced its $4.99 per month streaming service.That undercuts its Disney+ service, which is $6.99 a month or $70 for the year, and shares came under pressure as a result.In any regard, we can see short-term uptrend support (blue line) failing, while the 50-day moving average is acting as resistance. That's a change in Disney's tune and unless it can reclaim the 50-day soon, lower prices may be on the way.On the downside, $130 has been support since the April rally, with the 38.2% retracement just below. If that fails, the 200-day is on the table. Top Stock Trades for Tomorrow 3: NetflixNetflix (NASDAQ:NFLX) can't fall back on the type of profitability that Disney can. As such, shares continue to linger near the lows.InvestorPlace readers knew to be careful with the stock when it failed to reclaim its 20-day moving average. As expected, shares are now threatening to break below its recent lows. If it does, $270 is on the table. Below that and even lower prices are possible. Keep in mind, there are plenty of Q4 lows beneath $270.Over the 61.8% retracement at $290 changes the narrative. Top Stock Trades for Tomorrow 4: RokuShares of Roku (NASDAQ:ROKU) are getting hammered on Tuesday, down more than 10%. The day prior, Roku put in a bearish engulfing candle and the selling is cascading on Tuesday.The decline in high-growth stocks doesn't help, although it wasn't a complete blindside.So far, the 20-day moving average isn't buoying the name, but given that it ran from sub-$100 to $176.50 in less than a month, that's fair. Now, I would love for a test of the 50-day moving average. If it gets there, let's see if it draws in buyers or if it goes right through it like some other high-growth stocks did. * 10 Stocks to Sell in Market-Cursed September That's vague, but when a stock goes from $26 to $175 in less than a year and starts to unwind, it's best to proceed with caution. Those who love Roku for the long-term and sold on the rise, can consider nibbling a bit if it responds well to the 50-day.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL and DIS. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post 4 Top Stock Trades for Wednesday: AAPL, DIS, NFLX, ROKU appeared first on InvestorPlace.
Shares of Roku Inc. tumbled 12% in afternoon trading, with losses accelerating after Apple Inc. unveiled its price for its Apple TV+ service which was about half what was expected. Roku's stock was down about 4.9% just before the Apple's iPhone launch event kicked off at 1 p.m. Eastern. Apple said earlier that its Apple TV+ service will cost $4.99 a month for the family, with first shows available Nov. 1, which was below expectations of about $9.99 a month. Shares of other companies with streaming services as fell more after Apple's announcement. Netflix Inc.'s stock was down about 0.5% just before 1 p.m., but was recently shedding 3.2%; Walt Disney Co.'s stock was recently down 3.0%, after being down about 1.0% just before Apple's launch event started. Meanwhile, Apple's stock was up 0.3% in afternoon trading, adding to pre-event gains of 0.1%.
Roku (NASDAQ:ROKU) appears unstoppable. It has pulled back modestly from its recent $176.55 per share record high. However, at about $165 per share, Roku stock has risen by almost 65% since its August earnings report.Source: Michael Vi / Shutterstock.com However, with the massive run-up in ROKU, the price looks to have moved far ahead of both its current position and its near-term growth potential. Although the company will likely prosper long-term, at these prices Roku stock at best a trade. Roku Stock Seems UnstoppableWithout question, this company has logged some impressive accomplishments. It took what could have easily become a commoditized industry and turned itself into what my colleague Tezcan Gecgil calls "the pioneer of video streaming gadgets."InvestorPlace - Stock Market News, Stock Advice & Trading TipsGiven the lack of profit potential in selling hardware, the company's ad platform and now, the Roku Channel, drive the overwhelming majority of company revenues. * 7 Stocks to Buy In a Flat Market The Roku Channel cost the company its neutral stance between services such as Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN), and Disney's (NYSE:DIS) Hulu.Still, this has helped make this stock a growth machine, and the market has rewarded the company handsomely for it. The company may not earn a profit until at least 2021. Still, Wall Street forecasts revenue growth of 46.9% this year and 35.6% in fiscal 2020. ROKU and the FundamentalsThe equity has also proven all of my bearish predictions wrong. As a result, the ROKU stock price stands near record highs. Before the earnings announcement in August, I told traders to only buy as a speculative position on earnings. However, whenever I tell investors the stock has finished moving higher, it continues to rise.As it moves up, it separates itself further from the fundamentals. I do not expect ROKU to come in line with multiples and earnings growth for several years. However, the overall market does not typically perform well this time of year.Moreover, the U.S.-China trade war remains an ongoing issue. The equity trades at a forward price-to-sales (PS) ratio of just over 19, and almost 43 times its book value. At these levels, it has become priced for perfection.None of this means ROKU cannot keep moving higher. However, should the overall market turn or the company itself receives unexpected bad news, the equity would likely take a hard hit. Watch Insider SalesInvestors should also note that CEO Anthony Wood sold 35,000 shares at $155.06 per share on September 3rd. Other insider sales followed. Admittedly, CEO share sales can happen for numerous reasons. Also, the $5.4 million in revenue from the transaction amounted to a small fraction of his June sale of 400,000 shares for $41.3 million. However, this could point to doubts about ROKU in the near term.Again, I still like how the company has transformed the streaming space. If a fall swoon or a worsening trade war leads to a lower ROKU stock price, long-term investors should look at buying. However, at current prices, it has become a bet as to whether traders will take it higher or lower. The Bottom Line on Roku StockROKU has become unpredictable at current levels. I still expect the company to dominate the industry it created. I also believe that it will achieve new record highs long term. It remains very possible that those increases will even continue shorter term.However, such valuations have started to push ROKU into bubble territory. Once it falls significantly, it can take years, or sometimes decades, to recover.As a much younger trader who thought he could do no wrong, I once invested in Cisco Systems (NASDAQ:CSCO) during the years of the dot-com bubble. I held a nine-fold gain at the March 2000 peak only to see most of my gains disappear. Almost 20 years later, CSCO still has not recovered its 2000 price.Truly profiting from ROKU in the short term means knowing when to get out, as opposed to what time to buy. Perhaps following the example of the CEO would make for a wise decision.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post At These Levels, Buying ROKU Stock Is Speculating Not Investing appeared first on InvestorPlace.
Good news is always welcome, and nowhere more so than in the stock market. And while the markets were choppy in August, they have turned around in September. Since August 23, when it hit bottom, the S&P 500 has gained 131 points, or 4.6%. Optimism being cumulative, momentum is gaining as we head into autumn.Recent developments in the US-China tariff conflict may be contributing to the market’s upbeat outlook. President Trump initiated a new round of tariffs on September 1, and China retaliated in turn – this was after attempts to broker new talks broke down. Michael Hewson, chief market analyst from CMC Markets, summed up Wall Street’s take on the developments with wry humor: “Putting to one side the fact that these talks were supposed to be happening this month, and the fact that this has been a familiar pattern for two years now, markets still prefer to take an optimistic view.”Investors love to hear what’s going right, and for which stocks – it shows them where to put their money. One of the benefits TipRanks offers is a comprehensive database of top financial experts, including their latest stock reviews and ratings. We’ve dipped into that database, using the Trending Stocks tool to find three tech stocks that are generating buzz on recent positive news. AT&T, Inc. (T)This is an “old reliable” member of the NYSE. Historically a monopoly in the telephone business, AT&T was broken up in the early ‘80s under antitrust laws. In its current incarnation, the company remains a giant in the telecommunications industry, and is still the largest provider of landline and mobile phone services in the United States. T is also one of the market’s most reliable dividend stocks, with a high 5.52% yield and a long history of prioritizing shareholder returns.With that background, and the prospects of increased income from content streaming, it’s no wonder that T would attract attention from top analysts – and hedge funds. Elliot Management, the seventh largest hedge at $35 billion in AUM, recently announced yesterday a $3.2 billion stake in AT&T. In a letter to the company, the fund said: “Elliott believes that through readily achievable initiatives — increased strategic focus, improved operational efficiency, a formal capital allocation framework, and enhanced leadership and oversight — AT&T can achieve $60+ per share of value by the end of 2021.” Should AT&T match Elliot’s performance expectations, that would be a 62% upside from the current share price.The news from Elliot prompted a 1.4% jump in T’s share price. This came after the stock had risen 5.6% since August 23, the S&P 500’s most recent trough. The stock has outperformed the broader index’s 4.6% gains since that date.5-star analyst Colby Synesael, writing for Cowen on Sept 6, before Elliot’s announcement, noted, “AT&T shares have moved up roughly 24% this year but we believe there is more room to the upside as the company continues to execute against its 2019 guidance. Potential asset sales including some Latin American and tower portfolios could be used to pay down debt and further de-risk the story.” Synesael gives T shares a $40 price target, indicating confidence in an upside potential of 8.7%.Citigroup analyst Michael Rollins agrees that T shows potential for mid-term gains. He raised his price target from $37 to $42, and said, “We expect AT&T to remain in transition throughout 2019… the recent investments in the wireless strategy are more likely to help its competitive positioning for 2020.” His new price target implies a 14% upside to the stock.Overall, AT&T has a Strong Buy from the analyst consensus, based on 6 buy and 2 hold ratings given in the last three months. The recent share price gains have pushed T just above its average price target – but the most recent reviews show that the Street’s analysts are starting to revise that price target. Roku, Inc. (ROKU)Roku, the online television streaming service, is riding high on the rapidly growing popularity of ad-free content streaming. The stock went public two years ago, and for 2019 is showing a whopping 425% year-to-date gain. ROKU’s recent performance has pushed share price to 23% above its average price target.That fast rise is getting notice from Wall Street’s top analysts. Writing from SunTrust Robinson yesterday, Matthew Thornton raised his firm’s price target on ROKU by 171%, more than doubling the outlook to $163. He wrote, “We remain positive on Roku’s execution, fundamentals, and strategic value, and our concern over the company’s 2019 outlook versus consensus has kept us incorrectly on the sidelines.” He does point to the stock’s high valuation, however, as a reason to delay buying. He gives the stock a Hold rating for now.Also writing on Roku yesterday was 5-star analyst Tom Forte, of D.A. Davidson. Forte reiterated his Buy on the stock, with a $185 price target indicating confidence in a 15% upside to the stock. In his comments, Forte specifically noted Roku’s licensing efforts with TV manufacturers, saying, “Roku works with 11 brands, as the company's TV's are manufactured and sold by Roku TV brand licensees, all running its operating system (OS), and leveraging its hardware reference design.”Roku has a Moderate Buy rating from the analyst consensus, based on 7 buys, 5 holds, and 1 sell from the past three months. Concerns over the stock’s high valuation are cited as reasons to hold back, while optimism on the company’s prospects and overall performance underly the bulls. The current share price is $160. Roku is scheduled to report annual earnings on November 6. Activision Blizzard (ATVI)Activision has had a difficult time regaining traction in the stock markets after its sharp decline in the second half of 2018. The stock was essentially range-bound between $40 and $50 from November last year until this past August. However, the video game maker saw two recent pieces of good news and has popped 9% since September 2, double the S&P's gains.The first boost came on September 4, when BMO Capital upgraded its rating from Neutral to Buy. The second came yesterday, when Stifel placed ATVI shares on its “select list” of stocks to buy.Writing for BMO, Gerrick Johnson set a $60, a 40% from his previous target of $43. In his comments, he said, “We are increasing our target owing to two main factors. First, we are increasing our 2020 earnings-per-share estimate to $3 from $2.50, based on a higher conviction level that investments in core games like Call of Duty and World of Warcraft will generate an improvement in performance.“Second, we are increasing the valuation multiple to 20x from 17x. As investors get more comfortable with the turnaround story and as new catalysts develop, we believe the company's valuation multiple will expand.”Johnson’s new price target suggests an upside of 8.7% from the current share price.The next bump for Activision came when 5-star Stifel analyst Drew Crum, placed ATVI on his firm’s select list and said, “The stock currently trades at around 22 times forward earnings, above the five-year average. However, with improving fundamentals returning in 2020 (and beyond), valuations should start to look more reasonable. This year’s Call of Duty installment, along with the possibility of more exciting product news coming this fall, should help.” Crum’s price target of $65 implies an upside potential of 18%.Overall, ATVI keeps a Strong Buy from the analyst consensus, based on 11 buys and 3 holds assigned in the last three months. Shares are priced at $55.10, and the average price target of $56.36 gives the stock a 2.2% upside potential. ATVI gained 1% in yesterday’s trading.Visit the Trending Stocks page at TipRanks, to find out which stocks Wall Street’s top analysts are looking at now.
The hype buzzing around Roku (NASDAQ:ROKU) is real. In the last month alone, the streaming device maker reported blowout second quarter numbers which topped every estimate on Wall Street. That was followed by multiple analyst upgrades and huge price target hikes. And, the result has been a 20% price increase in shares of ROKU stock.This is nothing new for ROKU stock. In face, over the past nine months, Roku has reported three consecutive beat-and-raise quarters that smashed sell-side expectations across the board, while the stock received a flurry of Wall Street upgrades and the consensus price target has more than doubled, from ~$50 at the beginning of 2019 to over $120 today.During this stretch of operational out-performance and Wall Street love, ROKU stock has soared. Year-to-date, ROKU stock is up over 425%. The S&P 500 index is up about 19% in 2019.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn the big picture, this big rally makes sense. Roku is transforming into the cable box of the streaming TV world. One day, that will be an extremely valuable position that will generate tons of high-margin over-the-top video ad and subscription-sharing revenue. In the long run, Roku has tons of potential, and ROKU stock should move higher.But, while bullishness is warranted in the long run, caution is warranted here and now. Looking out over the next several years, it is simply tough to justify the current valuation underlying ROKU stock -- even under ultra-aggressive growth assumptions -- and that's coming from a long-time bull. Evidence of said bullishness? See: My November 2018 opinion; two months later, in January; again in March; and, again in June. * 7 Deeply Discounted Energy Stocks to Buy Net net, ROKU stock is a long-term winner with near-term valuation risks. The best game-plan to deal with that situation? Don't chase the rally. Let the stock cool down. Once it does, buy the dip, and hold for the long haul. Roku Will One Day Justify Higher PriceIn the big picture, Roku is a long-term winner that is transforming into the cable box of the streaming TV world, and as such, will one day produce tons of revenues and profits that will justify a materially higher ROKU stock price.The thesis is pretty simple: Everyone is migrating to the streaming TV world. That includes a bunch of demand -- consumers like you and me are spending more and more time in the streaming TV world -- and a bunch of supply which is chasing that demand -- by the end of 2020, every media company from Netflix (NASDAQ:NFLX) to AT&T (NYSE:T) to Disney (NYSE:DIS) will have one or more steaming services.The dynamic of the streaming TV world is defined by increasing supply and increasing demand. In any market, whenever you have a bunch of supply and demand, someone needs to step in, organize, and connect all that supply and demand. That's what Roku does. Through their content-neutral streaming aggregation platform, Roku allows any consumer to access their favorite streaming service in a friction-less manner, while simultaneously allowing any streaming service to reach their customers.Sound a lot like a cable box for the streaming TV world? That's exactly what Roku is -- the streaming TV world's cable box, aggregating and curating all the content supply in the streaming TV world so that consumers can watch all that content through one central access-point.How does Roku make money from this? Ads and subscriptions. On one end, with millions of eyeballs in its ecosystem, Roku can populate the ecosystem with a bunch of video ad dollars that are migrating away from the linear TV channel, and looking for a home in the streaming TV channel. On the other end, Roku earns a commission for every subscription accessed through its ecosystem.Both of those revenue streams could be quite large. Both are also high margin. As such, at scale, Roku projects as a company that could produce a ton of revenues and profits -- the sum of which should warrant huge gains in ROKU stock in the long run. Near-Term Valuation Risks Should Give PauseAlthough the long-term bull thesis on ROKU stock is compelling, near-term valuation risks should give investors pause for the time being.Here are the raw valuation numbers. (Warning: they aren't easy to swallow.) The forward enterprise-value-to-sales multiple stands at over 17x, while the forward enterprise-value-to-EBITDA multiple is near 500x. The trailing price-to-sales multiple is over 20x. Further, Roku doesn't project to be profitable until FY21, and in that year, earnings are projected to be about 50 cents a share … so ROKU stock is trading at 340x earnings that are two years out.To be sure, I'm not a huge believer in looking at current and trailing valuation multiples for growth stocks. They don't tell the whole story. As readers of my writing know, I like to make my own projections and see how that lines up with the current valuation.But, even when I do that with ROKU stock, I still have a tough time wrapping my arms around the current price tag.Here's roughly what Roku did last quarter: 39% account growth, 25% ARPU growth, 60% revenue growth, and 4% EBITDA margins on a last 12-months basis. Accounts, ARPU, and revenue growth are all waning, and project to keep slowing based on Wall Street estimates. Meanwhile, EBITDA margins are projected to keep moving higher. * 7 Stocks to Buy In a Flat Market Here are my assumptions for Roku into 2025: 25% annualized account growth, over 10% annualized ARPU growth, over 30% annualized revenue growth, and EBITDA margin expansion to more than 25%. In other words, while I think the Roku growth narrative slows from here, I don't think it will slow much, and I think this company will remain a big time grower for a lot longer.But, even under those assumptions, a $170 price tag for Roku stock seems aggressive today. My 2025 EPS target for Roku is $7.50 in a best-case scenario. Based on an application software average 35x forward multiple and 10% discount rate, that equates to a 2019 price target of about $160 -- below today's price tag. Bottom Line on ROKU StockROKU stock is a long-term winner. But, investors would be foolish to ignore near-term valuation risks, as such risks may ultimately put a cap on near-term upside in the stock.To be sure, this stock will go higher in the long run. I can't fault anyone for treating ROKU stock as a buy-and-hold situation. But, for investors looking to commit new money into the stock, there are probably better entry points than at the currently extended $160-$170 price range.As of this writing, Luke Lango was long NFLX and T. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post Roku Stock is a Long-term Winner With Short-term Valuation Risks appeared first on InvestorPlace.
Snap (NYSE:SNAP) stock has seen tremendous gains this year. Shares have soared from $5.38 on Jan. 2 to $16.62 at the close Sept. 6. Shares now trade at a substantial premium to social media peers Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR). But is this valuation justified? Snap posted strong earnings on July 23. But the company remains a social media also-ran.Source: ArthurStock / Shutterstock.com With these factors in mind, the SNAP stock price could easily "snap" lower. But as story stocks continue to rise, SNAP could rally higher.Read on to see why investors should look elsewhere for opportunity.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Current SNAP Stock PriceSNAP stock has stagnated since its July earnings release. But investors continue to give the company a premium valuation. With high expectations, what does Snap have in the cards to boost the share price? Mobile gaming could be the catalyst that sends shares higher. Evercore ISI's Kevin Rippey thinks so. The analyst upgraded Snapchat stock to "Outperform" on the company's future gaming prospects. Mobile gaming could generate $350 million in annual revenue by 2022. * 7 Stocks to Buy In a Flat Market But does this growth potential explain the current valuation? As InvestorPlace contributor Vince Martin wrote on Aug. 21, Snap needs massive growth to justify the current share price. By Martin's calculation, Snap needs to boost revenues by 40% just to break even. Even greater levels of growth are required for the company to "grow into its valuation."A new revenue stream could help inch Snap closer to profitability. But at the current valuation, is this opportunity worth the risk? Other social media properties are seeing growth slow. But they have the profitability Snap doesn't have. Let's compare SNAP stock to Facebook and Twitter, and see whether SNAP stock is a unique opportunity. SNAP Stock Trades at a PremiumUsing the enterprise value/sales metric, Snapchat stock trades at a large premium to Facebook and Twitter. Facebook shares trade at an EV/Sales ratio of 8.1. Twitter shares trade at an EV/Sales ratio of 9.6. But perhaps this premium is justified. Facebook's forward growth is 19%; Twitter's is 28.1%. With projected growth of 40% over the next year, SNAP stock may be worth the premium. But, at some point, growth must translate into profits.Snap may be able to continue riding the growth train. Nomura analyst Mark Kelley estimates Snapchat's user base could grow by between 5.5 million-10 million users this quarter. This is double Snap's projections of 2.5 million-4 million new users. This could indicate Snap's future growth prospects are higher than anticipated. Snap has not provided a date for the next earnings report. But based on historical trends, the next release date should be in late October.No matter the outcome, Snap needs continued high growth just to sustain its valuation. Any hiccup could devastate the SNAP stock price. What are the biggest risks? The much-anticipated recession could hurt ad revenue. A decline in digital ad spending would impact Facebook and Twitter. But given Snap's "also-ran" status, it could see a greater negative impact.Competitive pressure from Facebook is another risk. In the past, Facebook dropped the ball attracting Generation Z. With the unique Snapchat platform, Snap captured the zeitgeist of a rising generation. But Facebook is quickly regaining relevancy with the "Snapchat generation." Facebook's Threads app offers Snapchat-esque features within the Facebook universe. Bottom Line: SNAP Stock Priced for PerfectionSnapchat stock has seen big gains since January. But the company needs to meet expectations with results. Revenues are now over $1 billion per year. But can it continue growing revenue at a 40% clip? The company's move into gaming could help better monetize its user base. But Facebook is quickly catching up with new apps and features. This could reduce Snapchat's popularity among Generation Z.I do not want to be a SNAP bear. Given the strong performance of high-fliers such as Shopify (NYSE:SHOP) and Roku (NASDAQ:ROKU), all bets are off with large-cap growth names. A market correction could bring valuations back down to earth. But if the party continues for another year, the SNAP stock price could rally higher.But this is more of a speculation than a true investment. The fundamentals indicate SNAP stock is overvalued. Stay on the sidelines with Snapchat stock. Look for more solid opportunities elsewhere.As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post Snap Stock Could Easily 'Snap' Back Lower appeared first on InvestorPlace.
Second=quarter earnings season has come and gone, leaving investors with a mixed bag of results.From a headline perspective, 75% of companies topped profit expectations -- above the five year average profit "beat rate." But only 56% of companies topped revenue expectations -- below the five year average revenue "beat rate." Meanwhile, the revenue growth rate was just 4% -- the slowest reading since mid-2016 -- while the earnings growth rate was negative, marking the first time since early 2016 that the S&P 500 reported back-to-back quarters of negative earnings growth.In other words, it wasn't a great earnings season.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut some stocks did have a great earnings season. That is, some stock bucked the broader "mixed bag" trend and instead reported blowout Q2 numbers which propelled their stocks meaningfully higher.Which stocks crushed it this earnings season? And will they stay in rally mode for the foreseeable future? * 7 Industrial Stocks to Buy for a Strong U.S. Economy Let's answer those questions by taking a deeper look at 7 of the best stocks that absolutely crushed it this earnings season -- all of which are up 15% or more since they reported earnings -- and seeing whether or not these hot stocks can sustain their post-earnings momentum. Roku (ROKU)Source: Michael Vi / Shutterstock.com % Gain Since Earnings Report: 55%Streaming device maker Roku (NASDAQ:ROKU) reported Q2 numbers in early August that smashed expectations on all important metrics, including revenues, profits, active accounts, average revenue per account and margins. The report also comprised sequential revenue growth acceleration, broad margin improvements and sustained robust account growth, as well as a strong guide which implied that all of this positive growth momentum will persist for the next few quarters.ROKU stock shot higher in response. It hasn't slowed since. In the month since the earnings report, ROKU stock has risen a jaw-dropping 55%.This rally seems overextended in the near-term based on valuation and technical concerns. But the long-term growth narrative here is compelling, as Roku is transforming into the cable box of the secular growth streaming TV market. In the long run, that position will translate into tons of ad and subscription-sharing revenue dollars, all of which will be high margin and translate into big profits.Net net, ROKU stock seems overextended in the near term, but has tons of potential to zoom higher in the long run. Pinterest (PINS)Source: Nopparat Khokthong / Shutterstock.com % Gain Since Earnings Report: 20%Freshly public social media company Pinterest (NYSE:PINS) reported Q2 numbers in early August that topped every metric that mattered. Monthly active users topped expectations. Average revenue per user did, too. As did overall revenues and profits. Management also hiked its full-year 2019 revenue and EBITDA guides and sounded an optimistic tone on the conference call with respect to future user growth.PINS stock soared in response. It has largely maintained those gains ever since, and about a month later, the stock is up 20% from its pre-earnings price. * 10 Stocks to Buy for September PINS stock should stay in rally mode for the foreseeable future. The valuation is ostensibly rich at 20-times trailing sales, but this is a really big social media company with a wide reach and unique value prop that is in the very early stages of monetizing its 300 million user and growing platform. Thus, the trailing valuation will naturally be rich because that trailing sales base is growing very, very quickly -- 62% revenue growth last quarter. This big growth will persist for a lot longer, and as it does, PINS stock will more than grow into its rich valuation and head significantly higher in the long run. Take-Two Interactive (TTWO)Source: Thomas Pajot / Shutterstock.com % Gain Since Earnings Report: 15%When it comes to video game stocks, the most important operational metric is bookings, because it is the most indicative of the underlying healthy of the company's business and gaming portfolio. With that in mind, it should make sense that after video game publisher Take-Two Interactive (NASDAQ:TTWO) reported a big bookings beat in its second quarter earnings report about a month go and also hiked its full-year bookings guidance, TTWO stock popped.TTWO stock has added to those gains ever since and today trades 15% above its pre-Q2 earnings price.This big rally in TTWO stock should persist for the next 12-plus months. Take-Two is supported by arguably the most robust content portfolio in the gaming world, headlined by franchises such as Grand Theft Auto, Red Dead Redemption and NBA2K. Consequently, even as the video game market has slumped in 2019, Take-Two has been just fine because Grand Theft Auto Online and Red Dead Online have maintained huge playing audiences.In 2020, Take-Two will do even better, mostly because the company will still have its robust content portfolio and because the video game industry backdrop will dramatically improve with the launch of new cloud gaming platforms and next-gen gaming consoles. All this new hardware innovation in 2020 will supercharge the entire video game market and create a rising tide that will lift all boats, most of all the boat that's at the head of the pack (TTWO stock). Micron (MU)Source: Charles Knowles / Shutterstock.com % Gain Since Earnings Report: 36%Depressed chip-maker Micron (NASDAQ:MU) reported Q2 numbers in late June that had "things are about to get a whole lot better" written all over them. It was a double-beat report, but more importantly, management sounded an optimistic tone on the call with respect to inventory reduction and improved NAND and DRAM pricing trends going forward.MU stock popped in response to those favorable numbers and comments. In the two-plus months since, more evidence has emerged which broadly implies that the worst of the NAND and DRAM market correction is in the rear-view mirror. Consequently, MU stock has stayed in rally mode and is up 36% since its earnings report.This big rally has more runway left. At the end of the day, as goes the DRAM and NAND pricing environment, so goes Micron's profits and so goes MU stock. Right now, there's a lot of data out there which points to the idea that the DRAM and NAND pricing environments are improving, including inventory reductions at Micron, stabilizing demand in Asia and reinvigorated data-center demand. If these improvements persist, then Micron's earnings will bottom soon and start to creep higher within the next 2 to 4 quarters. * Porsche Taycan: Do We Finally Have a "Tesla Killer"? Through that whole earnings bottoming process, MU stock should head materially higher. Target (TGT)Source: Robert Gregory Griffeth / Shutterstock.com % Gain Since Earnings Report: 25%Consumer discretionary stocks had a decent Q2 earnings season, but one consumer discretionary stock which had a monster Q2 earnings season was big box discount retailer Target (NYSE:TGT). In mid-August, Target reported Q2 numbers that were nothing short of spectacular -- big comparable sales growth which topped expectations, above-consensus revenue growth, gross profit margin expansion for the first time in three years, a huge profit beat and a big lift to the full-year profit guide.TGT stock exploded higher in response to the earnings smasher. It has stayed on a winning path ever since. Today, the stock trades 25% above its pre-Q2 earnings price.Although valuation is now a bigger concern that it has been in recent memory, Target stock should be able to run higher for the foreseeable future, driven by continued favorable operating results. Long story short, this company is on fire because they've figured out their omni-channel game and are now everywhere the consumer wants them to be with things line Target.com, buy-online, drive-up, fast delivery, etc. Consumers are warming up to all these options, and as they continue to do so in a healthy labor market, they will continue to spend big at Target.That means comps and profit trends will remain favorable for the foreseeable future. As they do remain favorable, TGT stock should remain on a winning path. Weibo (WB)Source: testing / Shutterstock.com % Gain Since Earnings Report: 20%China stocks didn't have the best Q2 earnings season, but one China stock that did do very well in Q2 was Chinese social blogging platform Weibo (NASDAQ:WB), whose Q2 numbers comprised the exact thing investors needed to see -- stabilization. For the past several quarters, Weibo has suffered from rapidly slowing revenue growth and falling margins. In Q2, revenue growth and margins started to stabilize, and the guide implied that this stabilization will continue into next quarter.As such, the Weibo growth narrative is going from "slowing" to "stabilizing," and this pivot has pushed WB stock up 20% since the company announced Q2 earnings. * 7 Industrial Stocks to Buy for a Strong U.S. Economy So long as trade war headwinds remain relatively muted -- granted, a big "if" -- then WB stock should head significantly higher from here. Not only are this company's core operational trends starting to stabilize, but those trends could potentially improve in a big way if the company's new Oasis platform gains critical traction. Such improvement could mark the beginning of a huge reversal in WB stock, which has dropped from $140 to $40 over the past 18 months. Shopify (SHOP)Source: BalkansCat / Shutterstock.com % Gain Since Earnings Report: 20%One stock that crushed it this earnings season, much like it has crushed it every earnings season over the past few years, is e-commerce solutions provider Shopify (NYSE:SHOP). In early August, Shopify reported a clean beat-and-raise second quarter earnings report that comprised 50%-plus gross merchandise value growth and healthy year-over-year profit margin expansion.Investors cheered the sustained top-line momentum and continued margin progress to the tune of a big post-earnings rally. SHOP stock has tacked onto those gains ever since. Since early August, the stock is up more than 20%.This is nothing new for Shopify stock. Thanks to secular growth tailwinds underpinning a more decentralized and direct approach to the global retail sales model, Shopify's e-commerce tools have seen robust adoption over the past several years. During that stretch, Shopify has rattled off big growth quarter after big growth quarter, while margins have moved higher with increased scale. Also during stock, SHOP stock has taken off like a rocket shop. Over the past 3 years, SHOP stock is up 800%.Those secular growth trends remain alive and well today and will continue to support robust and widespread adoption of Shopify's solutions for the foreseeable future. As such, this growth narrative is still in its first few innings. Over the next several years, Shopify will report many more big growth and big margin expansion quarters -- and the sum of all those quarters will ultimately push SHOP stock markedly higher.As of this writing, Luke Lango was long SHOP. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post 7 Best Stocks That Crushed It This Earnings Season appeared first on InvestorPlace.
I am not always right, and I almost never recommend momentum stocks.Source: AhmadDanialZulhilmi / Shutterstock.com But when I called Roku (NASDAQ:ROKU) an "interesting speculative play" in June 2018, I was underestimating myself.If you grabbed some shares at that time, you've hit a home run. At that point, ROKU stock price was about $40. Now trading around $170, Roku stock has a market cap of $17.6 billion. That's more than Discovery Networks (NASDAQ:DISCA), and more than CBS (NYSE:CBS).InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Industrial Stocks to Buy for a Strong U.S. Economy What's going on is consumers are shutting down their cable and rushing to embrace streaming, a.k.a, "Netflix (NASDAQ:NFLX) and chill." Roku's streaming stick, which is at the heart of its TV offerings, is a gatekeeper to this new world. Buy one, plug it into your WiFi, and you can buy all the entertainment you could ever wish for. Don't Look at NumbersIf you're the kind of investor who looks at numbers, however, ROKU made no sense even when I first recommended it.Roku's most recent earnings report, delivered July 17, showed a loss of $10 million on revenue of $250 million. Its revenue was up 59% year-over-year. Its active account total jumped 39%. Revenue from advertising and services, which it calls "platform revenue," was up a staggering 86%.Still, why would investors pay 20 times revenue for Roku stock? For the same reason former Microsoft (NASDAQ:MSFT) CEO Steve Ballmer paid $2 billion for the Los Angeles Clippers. Rarity.The Clippers are one of two NBA franchises in Los Angeles, the nation's largest market. ROKU is now the largest streaming stick provider, with 39% of the market. Amazon.com (NASDAQ:AMZN) has 30% of the sector. Mighty Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) have been left behind, and the market is maturing rapidly. A Takeover of Roku LoomsRoku's strength is based on its independence, but even at its present valuation, ROKU is no position to resist a determined acquirer.Roku's success makes Comcast (NASDAQ:CMCSA) and Charter (NASDAQ:CHTR) irrelevant to their customers. It has left most of the Cloud Czars in the dust. Investors who buy the shares, at any price, suddenly become a gatekeeper to entertainment for a generation. That's the argument analysts at Market Realist are selling, comparing Roku directly to Netflix.The comparison sounds valid. ROKU is now roughly where Netflix was 4 years ago, just about to make its turn toward international growth. It doesn't yet break out international numbers, but its ambitions are obvious. ROKU collects data directly from consumers, which drives its choices on what to offer through its own, ad-supported Roku channel.On the other hand, streaming is an easy hack. As Roku's own shareholder letter notes, anyone can easily stream from a game machine like the Microsoft Xbox or the Sony (NYSE:SNE) PlayStation. There are tens of millions of such devices in consumers' living rooms. Apple, Google and Amazon are all out there, along with Tizen, an open-source project backed by Samsung (OTCMKTS:SSNLF) and Intel (NASDAQ:INTC).ROKU is not Netflix. It does not have nearly the control over future streaming that Netflix has.But it is in a very powerful position. It's sitting at a poker table with 19 chips, next to players who have hundreds of them, and it has a hand with four aces.Roku probably has a year or two to cash in its chips, maybe to one of its cable rivals, maybe to Disney (NYSE:DIS), maybe to one of the Cloud Czars. They're all facing a build-or-buy decision, but when one (or more) decides to spend whatever it takes to take out ROKU, watch out.Today's investors are betting that it knows when to cash in.Dana Blankenhorn is a financial and technology journalist. He is the author of the environmental story, Bridget O'Flynn and the Bear, available at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AAPL, MSFT and AMZN. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post Roku Stock Looks Poised to Be Acquired appeared first on InvestorPlace.
According to a Nielsen study published last month, the number of U.S. households with streaming TV capabilities has been steadily growing since 2017. Based on the findings, 65% of American households could stream TV in the first half of the year, up from 59% in the year-ago period and 51% in the first half of 2017.Bearing this in mind, companies have been lining up to try and take a piece of this expanding market, which could reach $124.6 billion by 2025 according to Grand View Research. When looking for compelling opportunities within this space, Needham’s Laura Martin tells investors Roku beats out Netflix as her top pick. That being said, we used the TipRanks Stock Comparison tool to dig a little deeper to see how the stocks stands up against each other. Let’s take a closer look at the results. Roku Inc. (ROKU)While both occupy a significant portion of the streaming TV market, Roku and Netflix are two fundamentally different companies. Netflix operates as a subscription service while Roku’s business is based on streaming players and free content supported by ad-revenue.Martin believes that this key difference will fuel even more gains for Roku on top of the 454% year-to-date growth it has already seen. After meeting with Roku’s management on September 5, Martin’s bullish thesis has only been confirmed. The company expects that the Roku Channel, its free, live and premium TV channel, will be an aggregator of 100% of ad-driven free content as well as over-the-top (OTT) channels and movies.Any new or existing OTT streaming service will want access to Roku’s 36% of connected TV homes. The five-star analyst estimates that its advertising revenue will also continue to grow as almost $10 billion of the linear TV’s $70 billion of ad revenue moves to Roku.The company also has an advantage in terms of data. When every new user installs a Roku stick or TV, they must register that device in order to access Roku’s content. This registration process involves assigning a unique Device ID, with the company able to monitor the content that the Device ID views. Roku can then analyze what is viewed compared to the 30 million other households it has data on in order to target ads. Not to mention Roku is expanding its total available market with its new soundbar and subwoofer. While some analysts aren’t fans of Roku based on its hefty valuation and lack of positive EPS since its founding, Martin believes that the above factors imply a strong long-term growth narrative. "We would argue that Roku has the superior strategic position because it benefits from all new OTT channels including ESPN+, Disney+, Apple+, HBO Max, etc. because it is an aggregator and therefore gets a share of revenue from every content app it adds to its platform," she explained. As a result, the analyst reiterated her Buy rating and $150 price target. In general, Wall Street is also bullish on Roku as it has a ‘Moderate Buy’ analyst consensus. Given its massive year-to-date gain, it isn't surprising that its $123 average price target implies 28% downside potential. Netflix Inc. (NFLX) It’s no question that the dominant force in the streaming space has hit a rough patch recently. Investors were widely concerned after NFLX experienced a substantial drop in subscriber acquisition in its most recent quarter. That being said, Martin claims that its growing number of competitors will ultimately be its downfall. Over the next year, Apple (AAPL), AT&T (T), Comcast (CMCSA) and Disney (DIS) will all release their own streaming services to compete directly with Netflix. This is on top of the competition it already faces from Amazon (AMZN), Hulu and CBS All Access (CBS). Netflix is undoubtedly going to feel some pricing pressure from the competition. For example, Disney+ is a relative bargain with pricing starting at $6.99 per month, with its $12.99 per month premium package that includes Hulu and ESPN+ still less than Netflix’s equivalent service.Martin argues that with 60 million paid U.S. subscribers as of June 30, NFLX has the most to lose out of all the streaming services. “Parks Associates found 28% of consumers said they have subscribed to a streaming service to check out a single title. By implication, NFLX’s subscribers will at least churn out for a few weeks during the promotional period of each new streaming service launch,” she added. While the analyst does note that Roku relies on Netflix as the streaming service represented an estimated 20% of Roku’s total streaming hours in the first half of 2019, this is expected to change with the release of Disney+.Based on all of the above factors, Martin tells investors that NFLX is a Hold. Wall Street takes more of a bullish stance than Martin. The streaming giant boasts a ‘Strong Buy’ analyst consensus and a $411 average price target, suggesting 42% upside potential. And the Winner is… While Needham picks Roku over Netflix, the rest of the Street sees things differently. Even though the Stock Comparison tool shows that Roku has gained the most, Netflix takes the top spot in terms of both analyst consensus and upside potential. Discover Wall Street’s most loved stocks with the Top Analysts’ Stocks tool
Intuitively, many investors are undoubtedly tempted to ignore the recent move up in Amazon (NASDAQ:AMZN). Although AMZN stock has seen some volatility since hitting a bottom in August, shares fundamentally have a credibility problem.Source: mirtmirt / Shutterstock.com Everywhere you look, you see multiple pressure points. Of course, the biggest headwind comes in the form of the U.S.-China trade war. Neither side shows any interest in conceding to the other. Additionally, national pride and political reputation are at stake for both battling parties. While the conflict drags on, both the U.S. and Chinese economies are feeling the hurt.Because the trade war is taking its toll on multiple industries including manufacturing, it imposes problems for the consumer. If the tit-for-tat tariffs roll into next year -- and that seems likely to be the case -- consumer sentiment will almost surely fade. Of course, that's a huge negative for AMZN stock.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAnother factor working against Amazon stock is its target consumers' behaviors. Let's face it: most folks don't shop on Amazon.com to buy groceries or essential products. No, the e-commerce giant exists to serve our discretionary needs. In a decisive bull market, this was all fine and well.But with a possible market downturn on the horizon, AMZN stock looks less appealing. It's no surprise that last month, investors took a dim view on luxury retailers like Nordstrom (NYSE:JWN) and even mainstream Macy's (NYSE:M). * The 8 Worst Stocks to Buy Before the Trade Turmoil Cools Off But should investors avoid Amazon stock? Technically, the latest moves aren't that impressive over a larger framework. Still, on a fundamental basis, Amazon offers some surprisingly recession-resistant catalysts that make buying on any dips a viable proposition. E-commerce is Ideal for Cost-Conscious ConsumersLogically, in a recession, everyone should pare down unnecessary spending. After all, paying rent or buying groceries is far more important than that shiny new gadget. In that environment, consumer-levered investments like Amazon stock don't intuitively appeal to market buyers.That said, we're Americans. Although we'll collectively trim down our spending in a recession, we won't quit the habit. Witness the last recession, when retail sales, excluding food services, dipped noticeably. Yet total retail sales recovered completely inside of four years.Moreover, Amazon has taken an increasingly larger share of the broader retail pie. So, recession or not, people will shop on the e-commerce giant's website. And that augurs well for AMZN stock.You also must consider the inherently cost-effective nature of online shopping. Obviously, you don't have to drive to a physical location: you can simply pick and choose what you want from the comfort of your own home. Neither do you have to fight for parking or stand in line. Over time, these little frustrations add up to serious dollars, dollars which recession-hurting consumers don't have.Thus, don't be surprised if AMZN stock performs well in a recession, especially at the expense of traditional retailers. AMZN to Benefit from Premium on Cheap EntertainmentRecently, I made the case that a recession is exactly what Roku (NASDAQ:ROKU) needs. Although a seemingly click-baity thing to say, I presented a logical argument: during an economic slump, sources of cheap entertainment will experience a surge in demand.Understandably, humans can't keep swinging indefinitely. At some point, they need to unwind, or they need a little bit of joy to look forward to. For instance, during the Great Depression, the so-called golden age of Hollywood came alive. The box office provided a moment of respite to American workers who were otherwise battling an unprecedented crisis.By the way, this isn't just a yesteryear concept. During the Great Recession, beleaguered professionals flocked to the box office. * 7 Best Tech Stocks to Buy Right Now Now it remains to be seen if Hollywood can repeat its magic in the next recession. For what it's worth, I think it can. But one thing is certain: people will look for cheap distractions. AMZN has the right ticket.Once you're done extending your plastic on Amazon.com, you can take advantage of their streaming services. A few years back, the company spun off Prime Video in a bid to disrupt Netflix (NASDAQ:NFLX). And in a recession, Amazon has an advantage of consolidating various consumer-level components under one umbrella. AWS to Support Amazon StockThe beauty of Amazon stock is that it's no longer just a consumer-related investment. Over the years, the company has disrupted many technology sectors.The biggest impact so far is with cloud services. At the latest count, AMZN owns nearly half the public cloud's infrastructure. Incredibly, they're leading names like Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT), companies that really should take the lead here.Naturally, this gives Amazon considerable leverage and buffer should a recession strike. Moreover, the cloud dominance virtually guarantees the company continued relevancy, even in a slump. That's because when used appropriately, the cloud can save large enterprises money on operating costs.No matter where you turn, Amazon has multiple revenue streams to weather an economic crisis. Therefore, I'm more than willing to give AMZN stock the benefit of the doubt.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post 3 Reasons Why Amazon Stock Should be in Your Cart Ahead of the Recession appeared first on InvestorPlace.
With a market cap of $17.9 billion, Roku (NASDAQ:ROKU) stock is the largest over-the-top streaming content provider in the U.S. As consumers move from traditional pay-TV services to streaming delivery services, on Sept. 4, ROKU stock hit an all-time high at $169.70. Year-to-date, the stock is up over an eye-popping 451%.Source: Eric Broder Van Dyke / Shutterstock.com Advertisers are following those U.S. viewers. That's reason number one why, longer-term, I would not bet against Roku whose revenue increasingly comes from advertising. However, as the final quarter of the year gets under way, there is likely to be some profit-taking in the stock soon. Such a decline would potentially offer investors better entry points if they decide to hit the buy button later in the year, especially around the time ROKU stock releases earnings later in November. Let's look at what may be next for Roku stock heading into the fourth quarter. Business Model Fuels ROKU Stock PriceRoku has been a pioneer in streaming video gadgets. The company started as a hardware manufacturer, in its early days building boxes to enable viewers watch streaming content on their TVs.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNow ROKU stock is fueled by two revenue segments: Player, which represents sales of its digital media boxes; and, Platform, which includes advertising sales, licensing and other non-hardware revenue sources.Initially, Roku's player segment accounted for about 75%, while its platform segment, which generates revenue mainly through advertising and content partnerships, provided the other 25%.However, these ratios have been changing rapidly. Currently, the platform segment accounts for the bulk of the company's sales. And Roku's device sales growth is decelerating. The expanding platform business, in return, means that the advertising business is growing.In other words, once Roku's hardware makes it to viewers' homes, then both subscription services and advertising revenue through the platform create the real growth for the stock. The way Roku delivers personalized ads to TV audiences can in some ways be compared to the way Facebook (NASDAQ:FB) delivers ads over social media. * 7 Best Tech Stocks to Buy Right Now For example, Roku sells display ads that it shows on its home screen and on its screen saver. The company also offers ads within the videos it streams from particular channels available through the player. Advertising is now the biggest component of Roku's platform segment.Disney's (NYSE:DIS) new streaming service, Disney+, will launch on Nov. 12 and will include original movies and TV shows from the Magic Kingdom's brands. The entertainment giant has recently announced that Disney+ will be streamed on the PS4 and Roku, which is likely to give Roku stock price a boost, too. Roku's Q2 Results Showed Impressive GrowthWith financial results released on Aug. 7, ROKU revealed that second quarter 2019 increased 59% to hit $250.1 million. Platform revenue was up 86% YoY, topping $167 million. This segment now makes up more than two-thirds of total revenue.Roku's active accounts figure jumped to 30.5 million, each of which, on average, clocked more than three hours a day watching video content. The 60 million Netflix (NASDAQ:NFLX) U.S. subscribers watch about two hours of programming each day. Both have room to grow, according to a recent study which showed overall, U.S. adults watch about six hours of content daily. It's not difficult to extrapolate from that data point that Roku investors are reasonable in expecting the company to reach a higher subscriber base that watches even more hours of content.ROKU stock also benefited from strong Q2 sales for both Roku TVs and players. More than one in three smart TVs sold in the U.S. are Roku TVs, having taken the lead from Samsung to become the top-selling smart TV operating system (OS). Roku's OS, built specifically for televisions, is also available in Roku streaming boxes.The operating system enables Roku to have a direct relationship with its 30 million subscribers, who are increasingly spending more time on the platform.Earlier in August, Roku management also announced that the company was working with Walmart (NYSE:WMT) to roll out branded hardware. They will be sold under Walmart's "ONN" private-label brandFinally, adoption of OTT video services will likely see double-digit increases both in the U.S. and overseas. And Roku management is also looking at international expansion as the next strategic area of growth. Should Investors Worry About ROKU Stock's High Valuation?Most ROKU stock holders are well aware that the shares do not trade at bargain-bin valuation ratios, especially compared to its tech peers. For example, its current price-to-sales (P/S) ratio is over 20.7x. Companies generate revenue from the sale of goods and services. Analysts prefer a low P/S multiple, ideally below 1x. However, a P/S number between 1x and 2x is more common. To put the metric into perspective, S&P 500 index's average price-to-sales ratio is 2.1x.Another way to analyze the P/S ratio is to compare companies in similar industries or segments. Readers may be interested to know that the P/S ratio for Amazon (NASDAQ:AMZN) is 3.6x. For Disney stock, the P/S ratio stands at 3.3x. And for Netflix, the P/S is about 7.4x.Earlier in the year, ROKU stock was hit with several downgrades by analysts who voiced concern at stretched valuation levels.Further risk factors that ROKU stock faces include increasing competition and ROKU's lack of own content library. At present, Roku and Hulu, the video streaming service that is majority-owned by Disney, are the market leaders in over-the-top (OTT) advertising. OTT ads are shown on a TV screen through a smart (connected) TV, or streaming device. It is not wrong to assume that competition will intensify in this space in quarters to come. * The 8 Worst Stocks to Buy Before the Trade Turmoil Cools Off If Roku cannot keep up with the aggressive growth assumptions, then skeptics may become more concerned with low profits as well as its margins and the stock price could easily suffer. In other words, could ROKU stock price be getting ahead of itself? Should Investors Buy Roku Stock Now?Roku has been one of this year's hottest investments. And August as well as September, so far, have been good months for Roku shareholders. On Aug. 5, the share price saw an intraday-low of $96. Currently, ROKU stock is hovering around $170.If you are an investor who also pays attention to technical analysis, short-term indicators have become overbought and the charts would urge caution. As a result of the impressive 2019 price gains, short-term momentum indicators, which describe the speed at which prices move over a given period, have now become over-extended.Therefore, there is likely to be some profit taking in ROKU stock in the coming weeks. So investors should not rush to hit the buy button on Roku during the rest of the month.It is important to remember that shares can stay overbought for a long time. It is never easy to gauge when a given stock price is a peak. Only in hindsight, most investors have 20/20 vision.As long as ROKU's metrics are moving in the right direction, long-term investors should not pay too much attention to the daily volatility in the stock price. That said, if you already own Roku shares, you may consider hedging your position with at-the-money (ATM) covered calls with Oct. 18 expiry.As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post Is It Too Late To Buy Hot Growth Roku Stock After 2019's Near 5x Rise? appeared first on InvestorPlace.
(Bloomberg) -- Roku Inc. said on Saturday that it will be making its smart TV technology available in Europe.The Los Gatos, U.S.-based company will let manufacturers license reference designs for its TVs and use Roku OS to create smart TVs for sale in Europe, it said in a statement.Roku already has a partnership with Hisense Home Appliances Group Co. and expects to launch its first TVs with the Chinese manufacturer in the U.K. toward the end of the year.Roku’s announcement comes after Amazon.com Inc. announced an expansion of its smart TV offering in Europe this week. Bloomberg reported earlier this week that Amazon is working with manufacturers to bring a total of 15 Fire TV devices to market over the next year, including JVC-branded TVs for the U.K. and sets made by Grundig in Germany and Austria.To contact the reporter on this story: Daniel Zuidijk in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Katerina Petroff at email@example.com, Stanley JamesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
IFA – Roku Inc. (ROKU) today announced it is further expanding the Roku TV™ licensing program into Europe. Roku CEO Anthony Wood shared during his keynote speech that Hisense is the first European Roku TV partner and is expected to launch Roku TV models in the UK in Q4. Showcased this week at IFA, a world-leading consumer tech show in Berlin, attendees can see the first Hisense Roku TV for Europe in Roku’s Booth #234, Hall 26 and Hisense’s Booth #201, Hall 6.2.
Roku Inc (NASDAQ: ROKU ) CEO Anthony Wood has bold ambitions for the streaming video company , as he told CNBC he wants Roku technology included in one out of every two TVs worldwide. What Happened Streaming ...