Roku Inc (NASDAQ:ROKU) is likely to deliver an earnings beat for the second quarter when the smart TV and streaming company reports on Thursday, August 1, analysts at Wedbush believe.
Wall Street analysts, on average, expect Roku to post a loss per share of $0.45 on revenue of $935.3 million.
The Wedbush analysts see Roku beating expectations on the top and bottom lines and when it comes to active accounts, which are projected to increase 1% sequentially and 12.1% from the year-ago quarter to 82.4 million.
Roku continues to take market share as ad dollars shift from linear TV to digital connected TV, they wrote.
“Roku’s renewed focus balances new initiatives that result in near-term ROI with expanding free cash flow and tracking toward positive net income.”
Heading toward the year-end, average revenue per user (ARPU) is seen as stable or increasing as Roku benefits from political advertising, increased ad inventory and sports-adjacent ads.
“We think Roku’s guidance is conservative, and we see a path to profitability as Roku continues to expand its advertising capabilities, products, and partnerships,” Wedbush’s analysts believe.
While Roku still faces tough comparisons this year from streamer price increases and less churn last year, that eases as the year progresses and becomes significantly easier in Q4 2024.”
The analysts reiterated their ‘Outperform’ rating on Roku and $75 price target, implying upside of about 30% from its share price on Thursday afternoon.