Rocco Q3 2022 results are likely to be announced in the coming weeks for another quarter likely to see weakness in the company’s hardware business. We expect revenue to grow only about 4% year-over-year to around $710 million in the third quarter, which is slightly above the consensus estimate, although this could represent a significant slowdown from growth rates near 50% in the third quarter. from 2021. We expect net losses to stand at around $1 per share, which is slightly better than consensus estimates.

So what are some of the trends likely to drive Roku’s performance this quarter? We expect Roku’s business – which sells content and ads – to continue to expand revenue compared to last year, although growth rates may slow. Consumers have been pulling back on spending while advertisers are also rethinking their TV ad budgets due to rising inflation. This will likely affect Roku’s average revenue per user growth. During Q2 2022, Platform ARPU is up 21% to $44 and we expect a slowdown in Q3. Moreover, Roku subscriber growth – associated with the installation of new Roku streaming boxes and smart TVs – could also be affected by a weaker consumer spending environment, although this may partly be offset by retailers who are lowering TV prices to liquidate excess inventory. We expect Roku platform margins to also trend lower due to a higher mix of content sales versus ad sales and also due to potential concessions on ad pricing. Roku’s core media player business will also see a lower revenue trend due to weak consumer spending and strong competition from big tech giants Amazon.
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apple
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and Google
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who have worked to increase their presence in the space of broadcasting devices.

Now Roku’s stock is down more than 75% since the beginning of the year, both on fears of slowing growth and also as the broader market is moving away from unprofitable growth stocks to value stocks and bonds. However, we believe that Roku stock is undervalued at current levels, trading at just over 2x 2022 revenue – less than more than 10x in 2021 and also less than other digital ad players such as The Trade Desk (16x) and Meta (close to 4x). As Roku’s business faces headwinds, we believe its profitable business platform should continue to expand in the long term as ad dollars continue to shift from linear television to digital video formats. From a perspective perspective, sales of the Roku platform are up 30% over the first six months of the year, compared to Meta which sales have grown by less than 3% over the same period, and we value Roku’s stock at about $97, well ahead of the market price. See our analysis at Roku . Rating: expensive or cheap For more details on the factors that drive our Roku price estimation. Our analysis of Rocco’s revenue More details about the company’s business model and key revenue sources.

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