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ROKU – Market expectations are for improving Uniform ROA, but management has concerns about future growth, upcoming legislation, and the Roku channel
July 24, 2019
Roku, Inc. (ROKU:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 155.7x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about future growth, upcoming legislation, and the Roku channel
Specifically, management may lack confidence in their ability to meet their gross profit projections and to drive player gross margin growth in 2019. Moreover, they may be overstating the impact of their relationship with media companies, and they may be downplaying concerns about the impact of pending privacy legislation. Additionally, they may be concerned about the sustainability of recent growth in their Roku Channel, and they may be concerned about the loyalty of their customers to the Roku ecosystem.