Roku Share Price Forecast December 2021 – Time to Buy ROKU?

Shares of American streaming company Roku (NASDAQ: ROKU) are in the red today, after closing $227.93 as of December 27^th (19:59 EST). Roku is well-positioned to be a gateway for many other streaming services as more and more consumers leave traditional cable TV. Roku’s channel is showing great revenue and growth potential.

Roku – Technical Analysis

Roku’s financial statement indicates that the market cap is at $30.625 billion and total assets are worth $ 3.912 billion. Revenue for 2020 was at $1.78 billion with a profit margin of -0.98%, compared to $1.13 billion.

Moving averages such as Exponential Moving Average (30)(239.00), Simple Moving Average (30)(231.53),  Exponential Moving Average (50)(256.68), Simple Moving Average (50)(263.18) and Exponential Moving Average (100)(289.07) are indicating a sell action. Oscillators such as Relative Strength Index (14)(46.33), Stochastic %K (14, 3, 3)(51.64), Commodity Channel Index (20)(26.17), Average Directional Index (14)(28.80) and Awesome Oscillator(−7.45) are neutral.

68% of all retail investor accounts lose money when trading CFDs with this provider.

 

Recent Developments

Recently, macroeconomic headwinds have intensified Wall Street’s concerns regarding Roku’s deceleration in end-user engagement. After falling sharply over the last few months the shares are currently trading 52% below their all-time high. Roku’s core product includes Roku OS which is the only operating system purpose-built for connected TVs. Roku OS competes with the likes of Amazon’s Fire OS which are based on Android, an operating system originally designed for mobile devices. Roku’s product, however, is designed with a better viewer experience since it was originally designed with the living-room experience in mind.

Roku’s third-quarter results revealed that its platform accounted for 31% of connected TV viewing time worldwide, compared to Amazon took second place with 17%. The top ten cable TV advertisers doubled their spending on its platform over the past year, which has led to good financial results. Streaming hours on the platform increases by 21% to reach 18 billion. However, this is also a significant decline from the 54% growth in the prior-year period.

Streaming video viewership surged during the pandemic, which has brought many companies to the forefront. While Roku’s growth decelerated following such an unprecedented period of growth, it has still posted growth for this year, unlike the broader television industry. Roku has started launching 30 Roku Originals in May and another 23 titles in August. The aim of the management is to differentiate its add supported service revenue from the Roku Channel revenue.

After the first wave’s debuts in May, Roku saw record streaming with the Roku Channel ranking among the top five most-viewed channels on the platform during the third quarter. Roku also launched an advertising brand studio to help marketers create short-form TV programs and interactive video ads in March. Finally in June this year, the company debuted a weekly program that highlights trending TV shows called and movies called Roku Recommends.

Should You Buy ROKU Shares?

Investors should be pleased with Roku going into 2022 due to the success of the Roku Channel, which has become one of the top five streaming services on its platform in the third quarter. The company generated 86% of its revenue from video streaming in its most recent quarter. This has been growing over time compared to Roku’s hardware sales.

With plans to introduce 50 new shows over the coming two years, viewers can also watch more than 200 traditional cable-TV channels and licensed content from more than 200 partners with Roku. Roku has gained serious momentum this year making it a legitimate stock in the industry which is positioned to grow. Investors could thus add ROKU shares as we move into 2022.

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