Close Menu
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    StockNews24StockNews24
    Subscribe
    • Shares
    • News
      • Featured Company
      • News Overview
        • Company news
        • Expert Columns
        • Germany
        • USA
        • Price movements
        • Default values
        • Small caps
        • Business
      • News Search
        • Stock News
        • CFD News
        • Foreign exchange news
        • ETF News
        • Money, Career & Lifestyle News
      • Index News
        • DAX News
        • MDAX News
        • TecDAX News
        • Dow Jones News
        • Eurostoxx News
        • NASDAQ News
        • ATX News
        • S&P 500 News
      • Other Topics
        • Private Finance News
        • Commodity News
        • Certificate News
        • Interest rate news
        • SMI News
        • Nikkei 225 News1
    • Carbon Markets
    • Raw materials
    • Funds
    • Bonds
    • Currency
    • Crypto
    • English
      • العربية
      • 简体中文
      • Nederlands
      • English
      • Français
      • Deutsch
      • Italiano
      • Português
      • Русский
      • Español
    StockNews24StockNews24
    Home » Why Roku Stock Plunged 19% in 2024
    Cryptocurrency News

    Why Roku Stock Plunged 19% in 2024

    userBy userJanuary 10, 2025No Comments3 Mins Read
    Facebook Twitter LinkedIn Telegram Pinterest Tumblr Reddit WhatsApp Email
    Share
    Facebook Twitter LinkedIn Pinterest Email


    Roku (NASDAQ: ROKU) stock dropped 18% in 2024 according to data provided by S&P Global Market Intelligence. The market was wary of competition and is losing patience with its losses.

    Roku is the top U.S. streaming platform. More people buy and use its streaming devices than any competitor, including Amazon. It’s also the top platform in Canada and Mexico, and it’s starting to make a bigger play for international business.

    The device business comes with low margins. Even though it’s what Roku’s known for commercially, Roku actually makes much more money from its ad segment. The two work together, though, in an important dance. When users buy a Roku device, they get a Roku account to access all of the streaming networks available on the platform, including Roku’s free channels. More users means more viewers and more space for Roku to place ads and make more, higher-profit sales. The ad business accounted for 85% of the total in the 2024 third quarter and produced a 54.2% gross margin.

    However, Roku still isn’t profitable. It reported a $94 million net loss for the first nine months of 2024, although that was better than $631 million last year. Management is guiding for a $65 million loss in the fourth quarter. Wall Street is expecting an $0.85 loss per share in 2025.

    Part of the market’s concern is also that it hasn’t been able to increase average revenue per user. Management is claiming that’s due to its international expansion, which is crucial for keeping up its growth, but the ad business isn’t following yet.

    Finally, the market took it hard when Walmart announced that it would acquire Roku competitor Vizio back in February. That was completed in December.

    The market wasn’t very forgiving of Roku’s deficits last year, but there were many positives throughout the year. The third quarter was the fifth consecutive quarter of positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and free cash flow, and net loss is improving while sales continue to increase. It’s finding new ways to generate growth, from the international expansion to innovative ad launches and partnerships. It recently started showing ads on its home page, so even viewers who will go to a premium streaming channel see ads.

    The market is starting to sense the opportunity here, and Roku stock is up 32% over the past six months.

    Before you buy stock in Roku, consider this:

    The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Roku wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

    Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $858,668!*

    Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

    See the 10 stocks »

    *Stock Advisor returns as of January 6, 2025

    John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Roku, and Walmart. The Motley Fool has a disclosure policy.

    Why Roku Stock Plunged 19% in 2024 was originally published by The Motley Fool



    Source link

    Share this:

    • Click to share on Facebook (Opens in new window) Facebook
    • Click to share on X (Opens in new window) X

    Like this:

    Like Loading...

    Related

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
    Previous ArticleFewer US interest rate cuts expected after job gains surprise
    Next Article Five actions to improve the sustainability of steel | EY
    user
    • Website

    Related Posts

    What Does It Mean to Be Risk Neutral as an Investor?

    January 18, 2025

    SLB boosts dividend and buybacks, but warns of oil oversupply

    January 17, 2025

    Intel Stock Soars as Takeover Speculation Spreads

    January 17, 2025
    Add A Comment

    Leave a ReplyCancel reply

    © 2025 StockNews24. Designed by Sujon.

    Type above and press Enter to search. Press Esc to cancel.

    %d