The streaming market is becoming a lot more crowded as major corporations continue to start up their own projects in this area. As a result, streaming-giants have seen their stocks fall as their competition continues to grow.
That’s exactly what has happened to Roku (NASDAQ: ROKU) on Wednesday, whose shares fell by over 15% after Facebook (NASDAQ: FB) announced that they would also be joining the streaming business as well as cable TV provider Comcast (NASDAQ: CMCSA) which stated they would offer a free streaming box to internet subscribers.
Facebook announced its new product, Portal TV, which is a gadget with a microphone and camera that connects to user’s TV’s, allowing people to stream content from various providers while also letting them make video calls. The Portal TV is priced at $149 and would begin shipping in early November, with analysts paying close attention to how it will perform.
On the other hand, Comcast announced that they would be giving free Xfinity Flex streaming boxes to their internet-only subscribers, whereas before they had charged them $5 per month for the device. This box is a direct competitor to Roku’s own streaming boxes and would allow users to play videos from Netflix, YouTube, and Amazon Prime.
Streaming has quickly become one of the most competitive markets in the tech industry, with many different giants and media companies jumping into the market to try and grab the attention of consumers. This includes companies like Apple and Disney, who both launched their own Apple TV+ and Disney+ streaming services.
Analysts are still quite optimistic about the stock, however, despite the growing competition it has been facing. Guggenheim Securities analyst Michael Morris recently went on to say that he thinks shares could continue to go up, especially as the company expands internationally. “As the company expands its international offering…we see underappreciated opportunity for the company to drive significant economic growth and create value for shareholders,” said Morris according to Barrons. He ended up raising his target price for the stock from $119 to $170 per share, suggesting that these recent losses are a good buying opportunity for the company.
Shares of Roku were down 13.7% on Wednesday’s markets, sliding down an extra 1.7% in after-hours trading as overall losses totaled 15.4%. While this is one of the largest single-day drops in the stock’s history, shares of the streaming-giant have been steadily rising over the past few months, growing from $65 in mid-March to its current price at $130 per share.
Roku Company Profile
Roku Inc operates TV streaming platform in the United States. Its TV streaming platform allows users to discover and access a variety of movies and TV episodes, as well as live sports, music, news, and others.
The operating segments of the company are Player and Platform. It derives key revenue from the Player segment which consists of net sales of streaming media players and accessories through retailers and distributors, as well as directly to customers through the company’s website.
Platform segment consists of fees received from advertisers and content publishers, and from licensing the company’s technology and proprietary operating system with TV brands and service operators. – Warrior Trading News