Once a pandemic darling that was making its investors rich, Roku (NASDAQ: ROKU) has come crashing back toward Earth. The shares trade 88% below their all-time high, which was established in July 2021.
But don’t let that distract you from the actual business. This leading streaming platform has some positive attributes that investors should know and appreciate.
Here are three reasons to buy Roku like there’s no tomorrow — and that’s on top of the fact that the stock trades at a cheap price-to-sales multiple.
Key metrics
The first reason to scoop up shares stems from its strong performance metrics. In the first three months of 2024, the business reported a 19% year-over-year revenue jump. And this was after revenue rose 11% in 2023.
What’s more, the user base continues to expand. As of March 31, Roku had 81.6 million active accounts. That figure was up from 80 million at the end of last year. And it represented an impressive 14% increase compared to the first quarter of 2023. This wide reach gives Roku top market share in the smart-TV market in North America.
Engagement shows no signs of weakness. In Q1, a whopping 30.8 billion hours of content was watched on the Roku platform. That number has continued to go up steadily with each passing quarter.
One area that might worry investors is Roku’s monetization trends. Average revenue per user totaled $40.65 in the first quarter. While this was down from six months ago, it does appear to be stabilizing.
Industry position
It’s been interesting to watch the changing media landscape over the past several years. From an investor’s perspective, it can be confusing trying to understand what’s happening. The good news, though, is that Roku looks to be well positioned in the industry.
It benefits from the cord-cutting trend, as consumers cancel their traditional cable-TV packages and move fully to streaming. In the U.S., less than half of all households still have their cable subscriptions. And the percentage is expected to keep declining going forward.
Given the multitude of streaming services available, having a single user interface…
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