The streaming war has been one of the most talked-about topics in the business press for quite some time, and one company that could greatly benefit from its is streaming device maker Roku Inc (NASDAQ:ROKU).
The company released its fourth-quarter results recently, and after the initial euphoria from Wall Street, the stock dropped by as much as 12%.
That being said, it should be noted that Roku generated revenues of $411.2 million in revenues, which beat Wall Street estimates of $391.6 million. The losses per share stood at 13 cents a share, which was better than analysts’ estimates of losses of 14 cents a share.
Last but not least, the total number of active accounts jumped substantially to as much as 36.9 million. However, that is not all. The company went on to state that in 2020, it expects to post revenues of $1.6 billion, which will reflect a year on year growth of as much as 42%. Hence, the drop in the stock price has come as a bit of a surprise for many market participants.
It is being conjectured that disappointment expressed by some analysts like Tim Nollen of Macquarie Research and Dan Forman of Olivetree Financial could have been an important factor in this regard. Both analysts had higher expectations from the company’s earnings.
In a letter to its shareholders, Roku has made some impressive predictions. The company revealed that the era of cord-cutting is definitely afoot, and leading advertisers, television networks as well as brands are going to embrace streaming in a big way. The company went on to predict that by 2024, as many as half of the total households in the United States are set to cut cords.
Roku asserted that the streaming decade is here, and more people across the globe are going to choose streaming as the main source of watching television. Such bullish views and the company’s performance proves that the drop in the stock price could well have been an anomaly.