CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
With ongoing worries on advertising spending, we lower our target price by $4 to $85 using a forward price to sales of 3.1x, in line with direct peers. We narrow our LPS by $0.50 to -$1.90 and start our 2025 LPS at -$1.10 per share. Roku, Inc. (NASDAQ: ROKU) posted Q4 2023 LPS of -$0.58, a $0.03 consensus miss. Our revenue forecast is $3.89B for 2024 and $4.42B for 2025 versus $3.48B in 2023, driven by subscriber growth and advertising revenue. ROKU’s Q4 net subscriber adds were +4.2M, or +14% Y/Y to 80.0M at year end, and ARPU declined 4% Y/Y to $39.92 per user. In Q4, the Platform segment realized 13% Y/Y revenue growth (84% of total revenue) and gross margins 55.3%, flat Y/Y. Devices was +15% (16%), with segment gross margin at -13.2%, 18.9 points better than a year ago. Weakness in Q4 is attributed to lower advertising from ROKU media and entertainment sponsors. Risks are more platform competition, weak device sales, and weaker subscriber growth demand in the U.S./Mexico. ROKU has $2.0B in cash/cash equivalents and no debt.