Roku Poised for Streaming Dominance With Data, Ads, and Improving Profits
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Roku is the dominant player in streaming TV, accounting for 38% of US household streaming hours. As cable TV declines, Roku is poised to capture more market share.
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Roku has strong partnerships with major streaming services like YouTube, Netflix, and Amazon Prime Video, allowing it to aggregate data and understand audience behaviors.
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Roku has invested heavily in advanced advertising capabilities like AI-powered ad targeting. This gives them a competitive edge with marketers shifting spend.
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While currently losing money from growth investments, Roku has been cash flow positive since 2020. Slower expense growth is forecasted showing improved efficiency.
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If Roku leverages AI to optimize operations and boost advertising performance in 2024, its discounted valuation could rerate higher as profits materialize.