Roku is expected to publish Q3 2023 results on November 1. While the advertising market has seen headwinds as marketers hold back due to weak consumer spending, we expect Roku to see some recovery in its revenues versus last year. We expect revenue to come in at $855 million, slightly ahead of consensus estimates and up by about 23% versus last year. We project that net losses will stand at about $2 per share, slightly better than the consensus estimates. So what are some of the trends that are likely to drive Roku’s performance for the third quarter? See our analysis of Roku Earnings Preview for a closer look at what to expect when the company publishes earnings.
Amidst the current financial backdrop, ROKU stock has suffered a sharp decline of 80% from levels of $330 in early January 2021 to around $60 now, vs. an increase of about 15% for the S&P 500 over this roughly 3-year period. However, the decrease in ROKU stock has been far from consistent. Returns for the stock were -31% in 2021, -82% in 2022, and 47% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 10% in 2023 – indicating that ROKU underperformed the S&P in 2021 and 2022. In fact, consistently beating the S&P 500 – in good times and bad – has been difficult over recent years for individual stocks; for heavyweights in the Consumer Discretionary sector including AMZN, TSLA, and HD, and even for the megacap stars GOOG, MSFT, and AAPL. In contrast, the Trefis High Quality Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could ROKU face a similar situation as it did in 2021 and 2022 and underperform the S&P over the next 12 months – or will it see a recovery?
Support authors and subscribe to content
This is premium stuff. Subscribe to read the entire article.