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Buy Roku Stock on the Dip as a Bet on Netflix, Disney & Streaming TV Growth?

Benjamin Rains
Updated ·2-min read

On today’s episode of Full Court Finance here at Zacks, we break down Roku’s ROKU fourth quarter fiscal 2019 financial results. We then take a look at what to expect from the streaming TV firm to see if investors should consider buying Roku stock on the dip, with Disney DIS, Netflix NFLX, and others all set to expand their customer base.

Roku reported its Q4 results last Thursday and the stock fell over 6% Friday, despite initially climbing. Shares of Roku then slipped again Tuesday, which did coincide with a broader market downturn after Apple AAPL said the coronavirus will hurt its quarterly sales.

Wall Street might be worried about Roku’s valuation picture. Plus, investors likely aren’t pleased by the fact that the streaming TV company is expected to report adjusted losses in fiscal 2020 and 2021, after it swung to a loss in 2019.

With that said, Roku’s portfolio is more diverse than ever and it has spent money on expansion. Roku sells multiple streaming TV players and its Roku smart TVs are widely popular. Yet, it is Roku’s advertising-heavy platform unit that has driven its strong sales growth recently.

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Going forward, more advertising dollars are set to shift to digital, and the streaming TV age is really just getting started. Disney and Apple entered the market in November and Comcast CMCSA and AT&T T will soon enter the fray alongside Amazon AMZN and industry leader Netflix.

Roku is currently a Zacks Rank #2 (Buy) and its stock price rests far below its 52-week highs.

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Click to get this free report AT&T Inc. (T) : Free Stock Analysis Report Comcast Corporation (CMCSA) : Free Stock Analysis Report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report Roku, Inc. (ROKU) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research