On the whole, analysts continue to be divided on their
opinion on the stock, with six out of 12 recommending Buy. While four analysts
have a Hold rating, two have Sell. In this scenario, it becomes difficult of an
investor to be absolutely sure about a stock.
There is only one slight detail that you need to focus on to merit the stock. All analysts converge on the stock’s long-term prospects, driven by the massive expansion opportunities that are present outside the US market, as well as the remarkable growth trend achieved in the advertising segment, aka the Platform unit (see image).
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The platform business, which generates money through subscriptions, OS licensing, advertising and transaction revenues, has been churning high margin returns to the Los Gatos, California-based company.
Though the company is popularly known for its hardware, this segment (Player) currently accounts for only about one-third of its total revenue.
Also to be noted is the fact that international revenues accounted for only about a tenth of its total revenue in the most recent quarter. You may expect further expansions in the years to come, which is likely to establish Roku as a leading content streamer.
In the short term though, the stock may experience a
correction, following the long bull run. On an average, the stock has a 12-month
price target of $89, which is at a 14% downside from the last close.
However, if you are planning to hold it longer, you may see more returns coming your way. Wall Street expects 41% growth in sales in the current fiscal year and 34% growth in the next one. Hence, even if you suffer short-term losses, keeping it locked would probably secure better returns.
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