ARK Invest’s (ARKK) under-performance worsened after Roku (ROKU) posted quarterly results.
Roku posted revenue growing by 33% Y/Y to $865.3 million, below the 38% analyst consensus. Player sales are lagging, down 9% sequentially, to $161.7 million. Its active account led to 60.1 million accounts. In addition, streaming hours grew by 15% to 19.5 billion. When ROKU stock fell by around 20% after the earnings report, investors overlooked its average revenue per user rising by 43% Y/Y to $41.03.
Markets dumped ROKU stock because Roku forecasted Q1 revenue of $720 million. EBITDA of $55 million is below the expected $78.4 million. The company blamed the ongoing supply chain disruption. This hurt the TV industry, especially unit sales. Still, the post-pandemic phase changes consumer behavior.
After Netflix (NFLX) set low subscription expectations, cloud stocks reported a slowdown, and e-commerce firms lost the pandemic push, Roku is no exception. People in locked down gladly bought a Peloton (PTON) bike to exercise indoors. They watched more streaming content than ever. Governments are setting a policy to live with Covid. The sudden shift away from staying at home and going outdoors and traveling will permanently end the growth that Roku enjoyed.
