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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Roku, Inc. (XNAS:ROKU) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ROKU
Name:
ROKU, INC. (XNAS:ROKU)
Sector:
87.03M
Industry:
Entertainment
CEO:
Mr. Anthony Wood
Total Employees:
3,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -100.72% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ROKU, INC.(ROKU) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ENTERTAINMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
65.99
One Month Price Target:
$66.61
Six Month Price Target :
$69.73
Likely Price in One Year's Time:
Ticker:
$73.46
Likely Trading Range Today Under (Normal Volatility)
$65.46
Price Upper limit ($) :
$66.52
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$59.54
This week:
$51.56
This month :
$37.12
Other Primary facts
Market Cap:
8.79B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
137.93M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.23%
-23.07%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$95.96
$82.34
$36.02
$49.64
Medium risk (<10%) entry points
Buy Call
Sell Call
$77.91
Buy Put:
Sell Put:
$75.00
$54.04
$56.98
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ROKU
Sharpe Ratio:
-0.21%
Comparison:
ROKU, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -166.71% lower than the industry
& is -109.34% lower than the market/S&P 500 average
Average Returns/Yield of
ROKU
Daily returns:
0.00%
Weekly returns:
-0.01%
Monthly returns:
-0.03%
Yearly returns:
6.78%
Comparison of returns:
Average annual returns/yield (last 3 years) is -104.58% below industry average
Classification:
ROKU, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.5
Statistical test of Returns:
ROKU has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.76%
Weekly Volatility:
10.65%
Monthly Volatility:
21.30%
Yearly Volatility:
73.77%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.10%
Volatility in last five trading days has been -55.82% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-9.78%
Weekly VaR:
-21.87%
Monthly VaR:
-43.74%
How Much Can the price of
ROKU
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-39%
Worst case (decline):
>85%
This translates to price declining to:
$40.45
This translates to price declining to:
$9.90
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
ROKU is a 208.75% riskier investment compared to the market/S&P 500 & is 164.50% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 39.41% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ROKU
Beta in relation to market/S&P 500--1.68
Expected beta in 1 year's time:
1.355
Expected beta in 3 year's time:
1.916
Unlevered (debt free) Beta:
1.451
Beta in relation to Nasdaq (XNAS):
1.458
Beta in relation to all global stocks::
0.689
Beta Comparison & Analysis
Beta of competitors/peers::
1.119
Beta is 50.52% higher than peers
Average Industry Beta:
1.34
Beta is 25.72% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
12.69%
Sustainable growth rate is -64.36% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.150
Alpha is 170.40% above industry average alpha yield
Alpha is -955% below the market average
Analysis of Cost of Capital of
ROKU
Equity cost of capital:
0.147
Equity cost of capital is 19.15% above industry mean WACC
Unlevered (without debt) cost of capital:
12.65%
Before-tax cost of debt:
0.57%
After-tax cost of debt:
0.45%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.45%
WACC is 47.07% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$21.20
Revenue growth rate per share of (3Y):
3.24
Annual revenue growth rate is 662.10% above the industry average
EPS:
$0.97
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$1.33
-
-
Debt per share
$3.22
EBITDA per share
$1.53
Valuation Analysis Today of
ROKU
P/E Ratio:
87.05
P/E Ratio of Competitors/Peers:
38.33
P/E ratio is 127.13% higher than main peers & is 222.04% higher than the industry
Stock price/value with industry average P/E ratio: $26.22
ROKU is 151.67% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.11
Price to sales ratio is 17.59% above the industry mean
P/B (Price to book value ratio):
3.24
Price to free cash flow: 49.63
Price to free cash flow ratio is 303.87% higher than the industry
Net income growth rate (3Y):
-2257.36%
Net income growth rate is 995.61% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
15.79%
Net debt to equity ratio:
-58.97%
Debt to assets ratio:
10.51%
Net debt to assets ratio:
-39.26%
Debt-to-asset ratio is -85.24% below industry average
Ability to repay debt:
Interest coverage ratio:
63.92
Interest coverage ratio is -14.07% less than industry average
Looking forward:
Debt growth rate:
450.66%
Annual debt growth is 17% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.28%
Analysis of Key Statistics
Correlation of price movement with the market:
0.418
Statistical significance of correlation:
ROKU has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.508
Stock price is -17.72% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.508
Correlation of price movement with Nasdaq (^IXIC):
-0.063
Covariance of price movement with the market:
-0.174
Kurtosis
2.572
Returns are, approximately, normally distributed (mesokurtic)
Skewness of returns:
-0.005
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
ROKU
Gross Profit Margin Ratio:
200%
Operating Profit Margin Ratio:
4.64%
Operating profit margin is -29.63% lower than the industry
Net Profit Margin Ratio:
200%
Effective Tax Rate:
-2.07%
Effective tax rate is -113.36% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
4.97%
Return on equity (ROE) is -90.38% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.31%
Return on assets (ROA) is -23.60% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
3.63
Current ratio is 121.60% above industry average
Cash Conversion Cycle (days):
69
Cash conversion cycle is 42.77% above industry average
The remaining useful life of property plant & equipment is: 2.1 years
Stock based compensation to net income ratio:
49.78%
In-depth Efficiency Analysis
Revenue generated per employee:
974.7K
Each employee generates 1% more revenue than industry average revenue per employee
EBITDA generated per employee:
70.2K
Each employee generates -80% less EBITDA than industry average revenue per employee
Profit generated per employee:
46.6K
Each employee generates -59% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
29.0K
Each employee generates -82886% less free cash flow than industry average revenue per employee
Assets/Capital per employee
374.5K
Each employee generates -82886% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 29.74%
Growth rate in R&D investment/expenditure is 24601.10% higher than the industry
Competitors/Peer firms of
ROKU
SIRIUS XM HOLDINGS INC. (XNAS:SIRI)
PARAMOUNT GLOBAL (XNAS:PARAA)
PARAMOUNT GLOBAL (XNAS:PARA)
LIBERTY BROADBAND CORPORATION (XNAS:LBRDK)
FOX CORPORATION (XNAS:FOXA)
FOX CORPORATION (XNAS:FOXA)
WARNER MUSIC GROUP CORP. (XNAS:WMG)
Yandex NV (XNAS:YNDX)
TAKE-TWO INTERACTIVE SOFTWARE, INC. (XNAS:TTWO)
Current Analyst Ratings
Strong buy�4%
Buy�4%
Hold�13%
Sell�0%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
2.92B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
1.48B
1.45B
524.02M
273.56M
786.81M
513.25M
-
1.31B
-
3.30M
70.39M
210.63M
135.80M
139.78M
136.94M
- 2839.00K
139.78M
Statement of Cash Flow
Date:
Period:
22.63M
Differed Income Tax :
-
Stock Based Compensation :
69.58M
Change in Working Capital :
- 9306.00K
Accounts Receivables:
75.68M
Other Working Capital:
5.57M
Other Non-Cash Items:
45.20M
Net Cash Provided by Operating Activities:
101.80M
Investments in PP&E:
- 14764.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
2.24B
-
2.24B
675.71M
72.86M
119.13M
3.10B
587.46M
161.52M
79.66M
-
-
294.82M
1.12B
-
4.23B
137.55M
131.92M
-
54.41M
531.58M
855.45M
444.12M
87.87M
557.63M
-
1.41B
14.00K
- 116327.00K
- 41.0K
-
March 31, 2022 at 6:00:00 AM
2.79B
2.81B
4.23B
-
576.04M
- 1659056.0K
-
-
- 14764.00K
- 1250.00K
-
-
-
3.35M
2.10M
- 82.00K
89.05M
2.24B
2.15B
101.80M
- 14764.00K
87.03M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
ROKU
2023
2024
2025
2026
2027
$76.32
$84.96
$94.58
$105.28
$117.20