Roku Shares Slump Amid Streaming Boom
Shares in streaming platform provider, Roku, slumped over 6% on Tuesday – its fourth straight decline, and longest losing streak since April.
The news has seen Roku shed over 12% during the four day plunge, further retreating from last week’s record highs.
Despite the recent decline, stock is still nearly up 250% since December’s slump.
Speaking to Bloomberg, DA Davidson analyst, Tom Forte, asserts Roku is in a “very favourable position”, where it benefit from large investments made by Netflix, Amazon and Disney.
“As video ad revenue gravitates to where the eyeballs are, to [over-the-top] services and away from legacy, linear television, I think it has the ability to grow into its valuation.”
The news comes as the global video streaming market continues to intensify, with Netflix losing several content licenses to in-house rival streaming platforms (e.g. Disney+ and CBS All Access).
Announced today, NBC’s blockbuster comedy hit, The Office, will soon depart from Netflix and reside on the company’s own video streaming platform for around five years.
Roku’s Q2 earning results are tipped to release early August, with Bloomberg analysts expecting revenue growth of over 40%.
The pace of growth is forecast to remain for the next quarter, slowing to 30% for the forthcoming two quarters.
Some analysts claim the broad shift to video streaming services will greatly benefit Roku, despite hardware competition from the likes Google, Apple and Amazon.