ROKU: Is This the Ultimate Bottom?

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Roku, Inc.’s ($NASDAQ:ROKU) Q2 card sent shockwaves last week, but ROKU has recovered a considerable extent of its prior week’s losses. Therefore, we believe investors are curious to know whether this is ROKU’s ultimate bottom. Our analysis shows that ROKU’s sell-off last week could be the market’s move to force a final capitulation, taking out as many weak hands as possible before staging an eventual bottom. This would suggest that the long-term prospects for ROKU remain intact, despite the near-term challenges. Do you think this will affect ROKU market and earnings in the long term?

Market Reaction

ROKU has been in the news a lot lately, and most of the coverage has been negative. On Friday, ROKU stock opened at $79.6 and closed at $82.3, up by 1.2% from last closing price of 81.3. Despite the negative press, ROKU’s stock price is still holding steady.

VI Analysis

Roku’s fundamentals reflect its long term potential, and the company’s VI app makes analyzing them simpler. The VI Star Chart shows that Roku is strong in asset, profitability, growth, and weak in dividend. Roku has a high health score of 7/10 considering its cashflows and debt, and is capable of sustaining future operations in times of crisis. Roku is classified as a ‘gorilla’, a type of company that achieved stable and high revenue or earning growth due to its strong competitive advantage. At the right price, it is suitable for those who want to invest for high capital gains. High growth companies are deemed more risky as they attempt to grow faster.

Summary

The Roku ($NASDAQ:ROKU) stock has been on a roller coaster ride over the past year, and things have only gotten more volatile in recent months. Despite all of this, the stock has actually been on the rise in recent days. It is up more than 1% so far today, and it is now trading at its highest level in weeks. So, what is driving the stock higher? There are a few factors that could be driving the rally. First, the company recently announced a partnership with Walmart (NYSE: WMT) that will see Roku streaming devices sold in Walmart stores. This is a big win for Roku, as it gives the company exposure to a huge potential customer base. Second, the Roku Channel, which offers free, ad-supported streaming of TV shows and movies, is now available on select Samsung smart TVs. This is a big deal because Samsung is the world’s largest TV manufacturer, and this could lead to a significant increase in Roku’s user base. All things considered, it’s not surprising to see the stock on the rise today. Roku continues to execute well despite the challenges it faces, and the long-term outlook for the company remains very positive.