Surprise: Roku's Cash Flow Is at an All-Time High. Here's What Investors Need to Know.
Shareholders are probably tired of hearing it -- I'm a shareholder and I know I'm tired of it -- but it still needs to be said: Shares of connected-TV platform company (NASDAQ: ROKU) are down almost 90% from highs reached back in 2021. The ride hasn't been fun in recent years and there are fundamental reasons the stock is down.
One of Roku's biggest problems is its gross profit -- how much it makes after taking out the direct costs of its products and services. The company's hardware devices (smart TVs and plug-in streaming devices) cost more to make than what it sells them for. Moreover, the gross profit margin for its operating-system software steadily declined in recent years.
Another problem for Roku is its operating expenses, which have steadily gone up. In the first quarter of 2024, the company had total operating expenses of $460 million, up 83% from its total operating expenses in the same quarter of 2021. By comparison, its total net revenue is only up 53% during this same time period.
Source Fool.com
Roku Stock
Currently there is a rather positive sentiment for Roku with 27 Buy predictions and 7 Sell predictions.
With a target price of 93 € there is a hugely positive potential of 77.72% for Roku compared to the current price of 52.33 €.
