fuboTV Inc.

NetFlix Inc

Nvidia Corp

Roku, Inc. Class A Common Stock

![](https://cdn.commonstock.com/907661c1c3710e7e9660b45846050db1297b9bc9eeb01a180057ac57eb6a585b-642x480.jpg)

We are in the midst of earnings season and **$ROKU is on deck for next Thursday (17th) after the bell and I am calling a turnaround!**

Lets take a look at the price action. It has been ugly to say the least. The stock is down a whopping 66% from its 52 week high of $490. Like many growth stocks $ROKU has been punished by the risk-off trade driven by the fear of rising rates due to inflation. I think that the baby was thrown out with the bathwater though.

**Last Quarters Earnings (Q3):**
Expected EPS: $0.06
Delivered EPS: $0.48 **said another way.. it beat by 667%**

Expected Revenue: $680M
Delivered Revenue: $679.9M **or a miss of 0.13%**

**This Quarters Earnings Expectations (Q4):**
Expected EPS: $0.04
Expected Revenue: $896M

**Earnings Commentary:** I think that EPS should be blown out of the water as $ROKU has a consistent history of doing this. Revenue on the other hand is a larger expectation than usual with an 32% expected growth on the top line. Despite this, hurdle I believe they can hit it. Q4 is typically a strong showing from $ROKU with the holiday season captured during this window.

**Thesis:** $ROKU is not $NFLX which I believe to be a positive. As we saw with $NFLX's latest quarter their growth is stalling and they really only have one lever to pull, price increases, which they have done repeatedly over the past few years. Additionally, they have absorbent costs in content creation and acquisition that is eating into their margins heavily. See more on this from my ["Streaming Ahead into 2022"](https://commonstock.com/memo/00e43271-dd2a-4d4b-9dc6-86914e2e9bc0) Memo. What I hope to see is $ROKU start pulling ahead of other streaming companies on the merits of their business model. Instead of focusing on content creation and subscriptions they focus on content AGGREGATION and ACCESS allowing them to have multiple revenue streams (Advertising, Revenue Sharing, Analytics, and Hardware Revenue via partnerships). The common theme of this strategy is it is extremely customer centric. $ROKU follows the printers and ink strategy of getting as many cheap devices / TV's into the market as possible. For more see ["Why Roku is Misunderstood"](https://commonstock.com/memo/1ee9dd13-686d-4bed-bbe4-0ad083ec5974) They then monetize this on the backend as you use the platform. They are exceedingly good at this strategy as they were named the [#1 TV OS... AGAIN..](https://newsroom.roku.com/news/2022/01/roku-tv-is-the-no-1-selling-smart-tv/wpvypjjd-1641222688)


**Conclusion:** Despite a rough 6 months for the company and tech in general, I believe $ROKU is well positioned to start differentiating itself from the rest of the streaming pack. Additionally, their strategy succeeds no matter who wins the Streaming Wars, the more services that come out and come onto their platform, the more revenue they will ultimately see from subscription revenue sharing. Lastly, they have secondary and tertiary revenue streams with Advertising and Hardware sales.

$ROKU has historically been my largest position by weight, only being surpassed by $NVDA due to their meteoric rise and $ROKU falling on hard times. If $ROKU can get the market on board I would not be surprised at all to see them reclaim that top spot.

I think it is interesting how in Q3 they absolutely destroyed their expected EPS yet their Q4 expected EPS is lower than their Q3 expected EPS. Out of curiosity, why do you think that Q4 EPS expectation is so low at $0.04?

Alex Biestek

Roku provides the simplest way to stream entertainment to your TV. On your terms. With thousands of available channels to choose from.

https://newsroom.roku.com/news/2022/01/roku-tv-is-the-no-1-selling-smart-tv/wpvypjjd-1641222688

Roku 

Operation Cannot Possibly Fail.. Again

Shop till you drop! 

Trying to practice what I preach and did some DCA buying today into some of my existing positions I feel are on sale or I’m trying to add some weight to in my portfolio ![](https://cdn.commonstock.com/da9cdd4d5142517935a5737cd17d35a3968011c69d39a17bfd34872bd75fab5a-1200x600.png)

Well done, @strib! Had you been buying on dips since you started investing? I think getting comfortable with buying on dips takes practice—an investor has to have a few laps of that feedback loop and see for themselves the confirmation that although it might have felt like a stab in the dark, it was the right time to buy after all.

Joshua Simka

Sidni Standard

Just letting everyone know **$ROKU** sub $200 is a steal! **$FUBO** just preliminarily raised revenue guidance for the quarter and broke 1M subs last quarter. 

With Lame-I-cron raging, flights being canceled all over, someone explain to me why people would be watching LESS TV? 

Streaming wars are still on and I see big opportunity in the space! 

I’ve been buying all along while they have been crashing with tech. Looking for a significant rebound. 



Putting your money where your mouth is, love it!

Josh Rozin

I'm long both $ROKU and $FUBO.  With $FUBO however, I'm very concerned about the path to profitability. They're spending a ton on sports licensing and I haven't seen any indication they can reach profitability anytime soon. Would love your thoughts on this @strib.

Alberto Wallis

PSA - Streaming

Bought 100% more ROKU

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