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Roku (ROKU) to Report Q1 Earnings: What's in the Cards?
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Roku (ROKU - Free Report) is set to report first-quarter 2020 results on May 7.
On Apr 7, the company announced that first-quarter 2020 revenues are anticipated to be slightly higher than its guidance issued on Feb 13.
Per the earlier guidance, revenues were expected between $300 million and $310 million, up 48% year over year at midpoint.
The Zacks Consensus Estimate for first-quarter revenues is pegged at $296.5 million, indicating 43.5% growth from the year-ago quarter’s reported figure.
Moreover, the consensus mark for loss has narrowed by 2 cents to 45 cents per share in the past 30 days. The figure is much wider than reported loss of 9 cents in the year-ago quarter.
Notably, for the first quarter, gross profit was expected between $143 million and $148 million. Further, adjusted EBITDA loss was predicted between $18 million and $23 million. The company now envisions these metrics to be in line with its past projection.
The company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 38.6%.
Let’s see how things have shaped up prior to this announcement.
Factors to Consider
Investors would watch for active accounts growth, which is an important metric for Roku. The popularity of The Roku Channel is expected to have aided active accounts growth in the first quarter of 2020. The ability to access free and premium content on the same platform has been a huge attraction for subscribers.
Roku now estimates nearly 3 million active account additions since Dec 31, 2019, totaling 39.8 million as of Mar 31, 2020.
The company’s active accounts jumped 36% year over year to 36.9 million in fourth-quarter 2019. Moreover, ARPU increased 29% to $23.14 (on a trailing 12-month basis).
Notably, the Zacks Consensus Estimate for first-quarter active accounts and ARPU is pegged at 41.12 million and $23.52, respectively. Active accounts and ARPU are estimated to increase 41.3% and 23.4%, respectively, from the reported figures in the year-ago quarter.
Additionally, Roku expects streaming hours to shoot up 49% year over year to 13.2 billion despite a negative impact from the rollout of “Are you still watching" feature in early first-quarter 2020.
The consensus mark for streaming hours stands at 14.61 billion, implying an increase of 64.2% from the year-ago quarter’s reported figure.
On Jan 21, Roku announced the launch of its streaming platform for audiences in Brazil which is expected to have added to the expected growth in streaming hours. The company partnered with AOC in Brazil to bring the AOC Roku TV to consumers in the country.
The solid surge in active accounts and viewing is attributed to the COVID-19 outbreak that forced more and more people to stay home.
Moreover, streaming hours growth is expected to boost TV streaming advertising on Roku’s platform.
The growing popularity of The Roku Channel is expected to have attracted advertisers in the to-be reported quarter. Also, the acquisition of Dataxu (a demand-side advertising platform) in the last reported quarter is expected to strengthen the company’s OTT advertising roadmap.
Further, the launch of streaming services — Apple TV+ and Disney+ — from Apple and Disney, respectively, on Roku’s platform, is expected to have aided Platform revenues, which accounted for 63.1% of revenues in the fourth quarter.
The consensus mark for Platform revenues is pegged at $219 million, indicating growth of 63.4% from the figure reported in the year-ago quarter.
However, the bottom line is expected to reflect the impact of cost escalations resulting from increased marketing expenses related to international expansion and content additions in the to-be reported quarter.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Roku has an Earnings ESP of -6.27% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:
Inphi Corporation has an Earnings ESP of +20.04% and a Zacks Rank of 2.
Take Two Interactive (TTWO - Free Report) has an Earnings ESP of +13.24% and a Zacks Rank #2.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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Roku (ROKU) to Report Q1 Earnings: What's in the Cards?
Roku (ROKU - Free Report) is set to report first-quarter 2020 results on May 7.
On Apr 7, the company announced that first-quarter 2020 revenues are anticipated to be slightly higher than its guidance issued on Feb 13.
Per the earlier guidance, revenues were expected between $300 million and $310 million, up 48% year over year at midpoint.
The Zacks Consensus Estimate for first-quarter revenues is pegged at $296.5 million, indicating 43.5% growth from the year-ago quarter’s reported figure.
Moreover, the consensus mark for loss has narrowed by 2 cents to 45 cents per share in the past 30 days. The figure is much wider than reported loss of 9 cents in the year-ago quarter.
Notably, for the first quarter, gross profit was expected between $143 million and $148 million. Further, adjusted EBITDA loss was predicted between $18 million and $23 million. The company now envisions these metrics to be in line with its past projection.
The company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 38.6%.
Roku, Inc. Price and EPS Surprise
Roku, Inc. price-eps-surprise | Roku, Inc. Quote
Let’s see how things have shaped up prior to this announcement.
Factors to Consider
Investors would watch for active accounts growth, which is an important metric for Roku. The popularity of The Roku Channel is expected to have aided active accounts growth in the first quarter of 2020. The ability to access free and premium content on the same platform has been a huge attraction for subscribers.
Roku now estimates nearly 3 million active account additions since Dec 31, 2019, totaling 39.8 million as of Mar 31, 2020.
The company’s active accounts jumped 36% year over year to 36.9 million in fourth-quarter 2019. Moreover, ARPU increased 29% to $23.14 (on a trailing 12-month basis).
Notably, the Zacks Consensus Estimate for first-quarter active accounts and ARPU is pegged at 41.12 million and $23.52, respectively. Active accounts and ARPU are estimated to increase 41.3% and 23.4%, respectively, from the reported figures in the year-ago quarter.
Additionally, Roku expects streaming hours to shoot up 49% year over year to 13.2 billion despite a negative impact from the rollout of “Are you still watching" feature in early first-quarter 2020.
The consensus mark for streaming hours stands at 14.61 billion, implying an increase of 64.2% from the year-ago quarter’s reported figure.
On Jan 21, Roku announced the launch of its streaming platform for audiences in Brazil which is expected to have added to the expected growth in streaming hours. The company partnered with AOC in Brazil to bring the AOC Roku TV to consumers in the country.
The solid surge in active accounts and viewing is attributed to the COVID-19 outbreak that forced more and more people to stay home.
Moreover, streaming hours growth is expected to boost TV streaming advertising on Roku’s platform.
The growing popularity of The Roku Channel is expected to have attracted advertisers in the to-be reported quarter. Also, the acquisition of Dataxu (a demand-side advertising platform) in the last reported quarter is expected to strengthen the company’s OTT advertising roadmap.
Further, the launch of streaming services — Apple TV+ and Disney+ — from Apple and Disney, respectively, on Roku’s platform, is expected to have aided Platform revenues, which accounted for 63.1% of revenues in the fourth quarter.
The consensus mark for Platform revenues is pegged at $219 million, indicating growth of 63.4% from the figure reported in the year-ago quarter.
However, the bottom line is expected to reflect the impact of cost escalations resulting from increased marketing expenses related to international expansion and content additions in the to-be reported quarter.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Roku has an Earnings ESP of -6.27% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:
Shopify (SHOP - Free Report) has an Earnings ESP of +23.41% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Inphi Corporation has an Earnings ESP of +20.04% and a Zacks Rank of 2.
Take Two Interactive (TTWO - Free Report) has an Earnings ESP of +13.24% and a Zacks Rank #2.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>