What the Smartest Investors Know About Roku Stock
Roku (NASDAQ: ROKU) shareholders have had some good reasons to tune out when it comes to the streaming video platform company. Its revenue growth slowed to a crawl through late 2022 even as its operating losses expanded. And in early November, management projected that revenue would decline in Q4 for both its hardware and content platform divisions.
Yet its shares have rallied in 2023, in part due to encouraging financial news from rival Netflix. Let's look at the main factors driving Roku stock's action early this year.
While Netflix has won praise from Wall Street by moving into the digital advertising business, Roku's recent results show that this is a poor operating model to rely on for most of your growth. The platform grew users and boosted engagement hours through the first three quarters of 2022; yet its advertising revenue still fell due to macroeconomic pressures. By contrast, when Netflix adds subscribers, its revenue and cash flow rise significantly.
Source Fool.com
