Monday, November 13, 2017


Can Roku Stock Keep Going After Last Week's 70% Pop?

Wednesday afternoon's hot quarter suggests that Wall Street was underestimating Roku's potential. All but two of the seven underwriters that took Roku public slapped it with uninspiring neutral ratings with the stock in the low $20s last month. The stock is now in the low $30s after hitting a new all-time high on Friday.

Roku's model is more compelling than you may think. Its operating system is now built in on a fifth of the smart TVs being sold. Hardware sales are sluggish -- player sales are flat through the first nine months of the year relative to a year earlier -- but the growing installed base of video buffs with either Roku media players or devices running Roku OS is delivering explosive platform growth. We've seen active accounts soar 48% to 16.7 million over the past year. Engagement is clicking as consumption, up 58% to 3.8 billion hours during the third quarter, is growing faster than the active base.

Roku.  Apple TV.  Amazon Fire.  Chromecast.

I own three Roku players and one Apple TV.  I have checked out a Roku TV.  I think Roku gets it compared to the others.  

Roku is easy to use.  There are a ton of apps and content for the Roku.

When the stock went IPO, I thought maybe I should short it.  Heck, it looks like a little device maker standing against the forces of much larger companies with much larger budgets.  And I wonder if a lot of the stock pop is due to people who think like I do, and that this isn't going to work.  But maybe these folks have been forced to cover their shorts since Roku published their earnings numbers!

Anyway.  I'm thinking about getting a Roku TV for my office.

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