Buy ROKU before earnings?
Thursday, after market close, $ROKU (Roku Inc) will report itโs Q4 earnings. It can be interesting to buy this stock before earnings.
๐ง๐ต๐ถ๐ ๐ถ๐ ๐๐ต๐:
Roku is the number 1 TV operating system in the Mexico, Canada and the U.S.
๐ฆ๐๐ฟ๐ฒ๐ฎ๐บ๐ถ๐ป๐ด ๐ต๐ผ๐๐๐ฒ๐ต๐ผ๐น๐ฑ๐
In itโs latest earnings report Roku announced that itโs streaming households rose with 13%. It has 85 million streaming households vs 75 million same quarter last year.
So they are doing a good job in adding new customers. And when you become a Roku customer, itโs likely you stay as a custumor for a longer time. This because you bought a TV with a Roku operating system or you bought a device to connect to itโs operating system. A TV is not something you replace very fast.
Now we already know that Roku reached the milestone of 90 million streaming households. They announced this early january! This is good!
๐๐๐๐ถ๐ป๐ฒ๐๐
Roku has 2 segments:
1. Platform segment
2. Device segment
If you look at the device segment, they are operating at a loss. But once Roku gets you in the ecosystem, the platform gross profit margin is much better. Around 50%. In the latest earnings you can see this. The platform gross profit margin was up 30% YoY.
The device gross profit was negative compared to the year before. What that means is that Roku is willing to take losses in order to get people in their ecosystem. And the the profits go up as people spend money and time on the platform.
Now another interesting thing is the decrease in operating expenses. This decreased 28%. So they increased their revenue and decreased their expenses. Also the loss from operations decreased by 90% YoY. That is impressive!!
๐ง๐ต๐ฟ๐ฒ๐ฎ๐๐ต๐
Now the most notable threath is the competition. The company $TTD (Trade Desk Inc) is developing a TV operating system, coming out soon. It remains to be seen how good that system is and if it can take market share.
๐๐๐ ๐ฏ๐ฒ๐ณ๐ผ๐ฟ๐ฒ ๐ฒ๐ฎ๐ฟ๐ป๐ถ๐ป๐ด๐:
We already know that Roku reached the 90 million streaming households milestone, but we do not know the rest of the numbers. Of they continue with the same growth it is likely to be good as well.
So do I think itโs a buy? Yes!
But I advice two things:
๐ญ. Buy 100% before earnings (highest risk)
๐ฎ. Buy 50% before earnings and 50% after earnings (to lower risk)
The second option is ofcourse the safest. At this point I do not have Roku in my portfolio, but I am planning on buying.
Please follow for more of these posts. Currently up +12,5% ๐ข
$DIS (Walt Disney)$NFLX (Netflix, Inc.)... Show More
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Fri Dec 05 2025 12:12:46 GMT+0000 (Coordinated Universal Time)
