Roku: Rising tensions with content publishers highlight
potential risks for long term earnings power -- Morgan Stanley
(152.40 -3.57)
Analyst Benjamin Swinburne said, "We continue to believe Roku's
valuation embeds a level of earnings that will be difficult to
achieve unless it reaches a substantially greater level of scale
and market share. At a $20bn EV and ~25x our '21E gross profits, we
believe the market is already pricing in global success and largely
ignoring rising risks. The key debate for Roku shares at these
levels is not, in our view, whether the consumer and advertisers
are shifting to streaming - they are. Rather, it is Roku's ability
to monetize this shift as a platform connecting consumers
(audience) with content (publishers). This ability hinges primarily
on its ability to drive scale, which it can translate into
leverage. The larger its user base and market share of connected TV
consumption, the greater leverage ithas over publishers in
extracting an economic rent. Similarly, the greater share of
streaming advertising inventory it can sell, the more effectively
it can monetize."
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I know some of you
Posted by jdaswani on 28th of Jul 2020 at 02:40 pm
I know some of you play ROKU - Off Briefing
ROKU
Roku: Rising tensions with content publishers highlight potential risks for long term earnings power -- Morgan Stanley (152.40 -3.57)
Analyst Benjamin Swinburne said, "We continue to believe Roku's valuation embeds a level of earnings that will be difficult to achieve unless it reaches a substantially greater level of scale and market share. At a $20bn EV and ~25x our '21E gross profits, we believe the market is already pricing in global success and largely ignoring rising risks. The key debate for Roku shares at these levels is not, in our view, whether the consumer and advertisers are shifting to streaming - they are. Rather, it is Roku's ability to monetize this shift as a platform connecting consumers (audience) with content (publishers). This ability hinges primarily on its ability to drive scale, which it can translate into leverage. The larger its user base and market share of connected TV consumption, the greater leverage ithas over publishers in extracting an economic rent. Similarly, the greater share of streaming advertising inventory it can sell, the more effectively it can monetize."