Roku on the Rise

Written by Jennifer Clark
Posted August 15, 2018 at 11:50AM

“What are you binge-watching?” has become one of the questions that I encounter the most when I have a conversation with a stranger or acquaintance. It’s an easy question to ask to get conversations started and to share similar interests.

We’re living in the age of streaming services as people continue to “cut the cord” of traditional televisions services. They're easy to use and give us consumers more options than we’ve ever had before! The only hard part about them is keeping track of all the subscriptions and auto bills that show up on your credit card.

And there’s one company that continues to change and has the ability to adapt to what consumers want. The company is called Roku. You’ve probably heard of it. Heck, your TV might even have its app installed on it. Or you may have seen its streaming hardware being sold at your local Best Buy with other devices like Google’s Chromecast...

Roku Is Thriving

Roku continues to change the way we think about television. It’s giving people options other than the traditional cable and satellite services. The company hasn’t been trading on the public market for even a year, but its shares continue to rally. The company is rallying hard because it continues to report exceptional financial results each quarter.

Roku’s recent strong quarterly financial results gave its stock a giant push 20% higher, just below $60. This was an all-time high for the company.

Recently, Dish Network announced that over the past year, it's lost 192,000 subscribers of its satellite Dish TV service. But it's also gained 41,000 subscribers to its Sling TV offering.

This decrease further proves that people who were once watching television are now switching over to streaming services for their TV entertainment. And Roku is making it even easier for these people to make the change...

Is Cable Dying?

Roku gives customers its easy-to-use hardware instead of subscribing to cable providers. The death of cable is imminent. If they haven't already, cable companies will need to start looking into ways to incorporate their own streaming services and platforms into their businesses. And this gives any company providing streaming services and hardware a huge advantage.

These streaming tech companies have a few choices: to compete with cable companies that have been around for decades or to partner with them. Some not-so financially strong companies will choose to partner with cable companies. But the others that are viable, like Roku, will have the opportunity to gain a huge market share.

Streaming is on the rise, and Roku is riding the profit wave. Roku has 22 million subscribers. Its growth would be only 10% away from taking AT&T’s top spot if Roku were a cable company. But Roku’s growth isn’t the only thing that the company has going for it…

Roku’s active users are spending an average of 2.8 hours per day watching streaming content on Roku’s devices...

Roku Is Building a Strong Business

This is great news for advertisers and for Roku! The company recently launched its own ad-supported movie channel. The platform allows for ads to be delivered in a personalized way, which is what helped build Google and Facebook into the powerhouses they are today. These types of ads are more effective and can give a higher price per view than traditional advertising. And this type of advertising will help attract more business from advertisers.

A recent report by Capital Market Laboratories makes the case that Roku is aiming to be the Facebook of television. That might not be the company’s goal entirely, but it'll be on its way there if it continues with its advertising platform and its growth in subscribers. Roku is on the path to success, and its recent share prices prove that.

Until next time,

Jennifer Clark
Pro Trader Today

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