Closing post
Time to wrap up - here’s some of today’s main stories.
Goodnight, and stay safe. GW
Shares in streaming company Roku have tumbled by a quarter today, after it missed revenue forecasts last night and issued underwhelming guidance.
Roku is one of the ‘pandemic winners’ that have found conditions more challenging of late (see also Peloton, Shopify, Zoom...).
Last night it reported that revenue growth slowed in the last quarter, to 33% year-on-year, from 51% in Q3.
For the current quarter, it forecast revenue of $720m, which implies 25% revenue growth, below expectations of $748.5m.
Shares have slid over 25% today to $108 - last July, they hit a record high of $490, before the boom in fast-growing tech firms faded.
As Bloombert puts it:
It’s a sharp reversal for Roku, which was among the stay-at-home winners amid the Covid-19 pandemic that shuttered cities for months on end. The stock gained nearly 150% in 2020 as the coronavirus accelerated a shift toward streaming video among consumers. Investors are now reassessing the valuation it had received, as they rotate out of high-growth tech names.
“At a time when interest rates were near zero and retail money poured into the equity markets, Roku was a perfect stock to own,” wrote Michael Nathanson, an analyst at MoffettNathanson, who has a sell rating on the stock. He noted that Roku had some blockbuster quarterly reports in the pandemic era, helped by growth in streaming video. “As the enterprise value pushed higher and higher, it just became harder and harder to justify that valuation.”
Stocks in New Low today: $ROKU, Current Price: $2, Change today: -25.10%, Total Traded Volume: 42571948 pic.twitter.com/BZiGljIU99
— Mehabe Capital (@mehabecapital) February 18, 2022
