Will Roku Complete Its Comeback With Q1 Results After the Close?

Roku Inc. (NASDAQ: ROKU) is scheduled to release its first-quarter results after the markets close on Thursday. The consensus forecast is a net loss of $0.45 per share and $306.72 million in revenue. In the same period of last year, the streaming media company said it had a net loss of $0.09 per share and $206.66 million in revenue.

In mid-April, the company provided an update on its first quarter. According to that update, Roku estimates 39.8 million active accounts as of the end of March, a net increase of nearly 3 million since December. Roku also expects first-quarter streaming hours will be 13.2 billion, a 49% year-over-year increase.

Looking at the first quarter, Roku expects to see total revenue in the range of $307 million to $317 million, with a net loss of $60 million to $55 million.

Early in the first quarter, Roku completed the rollout of its “Are you still watching” feature, which exits video playback after long periods of user inactivity. As previously noted, the rollout of this feature will moderate streaming hour growth. However, late in the first quarter, Roku started to see the effects of large numbers of people “sheltering at home.” For Roku, this has resulted in an acceleration in new account growth and an increase in viewing.

At that time, Anthony Wood, Roku’s CEO, commented:

Consumers are turning to Roku now more than ever. As the leading TV streaming platform in the U.S., Roku is proud to provide easy access to live news, free movies and TV, great paid content, and helpful programming for individuals and families who are sheltering at home. We have been working closely with advertisers to help update their plans to reflect new viewing patterns and adjust their overall marketing mix which has been affected by social distancing. While we expect some marketers to pause or reduce ad investments in the near term, we believe that the targeted and measurable TV ads and unique sponsorship capabilities that Roku offers are highly beneficial to brands today.

Excluding Thursday’s move, Roku stock had outperformed the S&P 500 and Dow Jones industrial average with a decline of about 5% year to date. In the past 52 weeks, the share price was up about 98%.

Here’s what analysts had to say about Roku ahead of the results:

  • Guggenheim has a Neutral rating.
  • D.A. Davidson rates it a Buy with a $150 price target.
  • Berenberg Bank has a Buy rating and a $137 price target.
  • Pivotal Research has a Sell rating and a $60 target price.
  • Loop Capital’s Hold rating comes with a $75 price target.
  • RBC has an Outperform rating with a $139 price target.
  • Needham’s Buy rating comes with a $160 price target.

Roku stock traded up about 5% at $134.44 on Thursday, in a 52-week range of $58.22 to $176.55. The consensus price target is $128.28.