Roku Stock Power Analysis: The streaming competition is tight

Roku Stock Power Analysis: The streaming competition is tight

Streaming platforms changed my viewing habits.

When I first connected my Roku, I didn’t leave my house for days.

I couldn’t believe all the channels I could get for free.

And then the bundles!

Some of these packages included many favorites, such as:

  • Paramount+ uses its ownership Showtime to create a premium package.
  • Created by NBC, Peacock Premium brought USA Network, Bravo and many other cable favorites.
  • Dinsey+ made waves Star Wars and National Geographic for content.

Any taste you may have in TV can be satisfied with one of these many packages.

But many people, myself included, wonder if these packages will end up looking a lot like … cable, the service that so many are trying to run from.

Critics say we are far from streaming services going that route.

Until then, let’s take a look at a service that has made a name for itself in the streaming world: Roku Inc. (Nasdaq: ROKU).

Roku stock rates a ‘high risk’ 16 out of 100 on our proprietary Stock Power Rating system.

Let’s take a closer look.

Roku’s Bundle falls short

Roku is an ad-dependent streaming platform and hardware vendor.

I discovered the wonderful world of The Roku Channel, which offers premium and regular TV, movies and even sports.

And it makes it easy to manage all my subscriptions by keeping them all in one place.

But the competition in the industry is only getting tougher.

In the second quarter, Roku reported widening losses. This is due to a drop in the number of active accounts.

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Roku’s total number of active accounts is a crucial metric that investors focus on.

Simply put, more accounts mean more ads that generate revenue for the company.

According to estimates for the third quarter, the company expects the number of active users to rise year over year … but at the slowest pace in at least 21 quarters.

Roku had a rough second quarter, and in a few days we’ll know if it’s recovered or slipped further.

But for now, let’s see why ROKU rates “High Risk” in our system.

Roku’s Stock Power Ratings and Low Value

Roku’s stock is in rough shape for a competitive market. The value is even worse.

We’ll get to that factor in a minute, but I wanted to look at the overall score first.

Roku earns an overall 16 out of 100 on our rating system.

ROKU’s share impact assessments in October 2022.

As shown above, Roku doesn’t rate in the green on any of our six fundamental factors.

It is ranked in red for size (24) and volatility (2).

This means the company is large ($7.67 billion market cap) and risky in terms of returns.

When it comes to value, our Stock Power Rating system not only looks at a company’s most recent quarter, but looks at multiple valuations over many time frames.

Most importantly, it checks whether the calculations improve or worsen.

Roku’s deteriorating fundamentals mean it is overrated compared to its industry peers.

This gives Roku a score of 20 on our value factor.

The bottom line

Roku Scores a ‘High Risk’ 16 out of 100 on our Stock Power Rating system.

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But we have much more in store for you who use our system.

For a highly rated stock to consider investing in, check out Matt Clark’s Share power daily.

Monday through Friday, he gives you one stock to buy or avoid on our system and tells you why – for free!

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