Question

Why do you think the stock for the company "Roku" is worth so much today. Is it because of great financial results or something else?

Research and answer this question.

Answer 1

Roku's stock has already soared close to 450% in 2019. That is massive. It is one of the best performing tech stocks of the year.

Roku was a small set top box provider back when it began. But currently it is a huge advertisement magnet.

-Connected TV OS is becoming a standard now
People want to stream their favorite content directly on their connected TV. Television manufacturers could either create their own operating system or could get it from a third party provider, Roku did just that at a very nominal price. This led to increase in Roku's OS powered TV. It has captured 44% of this market which is considerably higher than that of Amazon's fire stick.

-Growth
Roku's user base has soared to a massive 40% rise when compared with the previous year. It is all set to increase even further. As per the latest data, there's a Roku device in as many as 1 in 4 US households.

-Advertisement
Since it has such a huge user base, it has started to earn a lot of advertising revenue. As a matter of fact most of its revenues are from advertisement. Advertising revenue increase 86% compared to previous year.