CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
ROKU benefits on the pivot to video streaming from pay TV. The bull case scenario seems to be a low threshold of just reaching positive EBITDA in 2024. Assuming a high risk premium, we keep our target price at $75 on a forward P/S of 2.48x vs. media peers’ 2.0x average. We narrow our LPS in 2023 by $1.30 to -$3.50 and reduce 2024’s by $0.40 to -$2.40. ROKU posted a normalized loss of -$0.33 (GAAP loss of -$2.33) in Q3 2023 and adj. EBITDA was +43.4M, with guidance of +$10.0M in Q4 2023, which ROKU is steadfast on reaching positive EBITDA for the full year 2024. We forecast total revenue of $3.44B in 2023 and $3.82B in 2024. Platform unit realized 18% Y/Y revenue growth (86% of total revenue), which includes subscriber and advertising revenue. Devices were +33% (14%). Platform gross margins were 56% excluding impairment charges. Active users were 2.3M higher to 75.8M, and average revenue per user was 7% lower Y/Y to $41.03. We expect the TV scatter advertising market, -27% Y/Y in Q3 2023, to remain weak.