Roku's Holiday Season Forecast

November 03, 2022

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Roku's Holiday Season Forecast

A disappointing financial outlook was the reason shares of Roku (Nasdaq: ROKU) dropped 16.26% in after-hours trading on Wednesday.

Financials: In the third quarter, Roku reported a loss of 88 cents per share and revenue of $761 million; both were better than expected.

Meaningful Growth: Roku added 2.3 million incremental active accounts during the third quarter. The Roku Channel’s streaming hours increased by more than 90% and platform revenue grew by 15%.

Not So Fast: It’s a different story for Roku in the fourth quarter. The company expects the macro environment to further pressure consumer discretionary spending and degrade advertising budgets in the holiday season, especially in TV. As a result, Roku predicts that its player and platform revenue will drop.

Final Thoughts: Roku’s stock is already down 76% this year. While the company is bullish about the long-term TV streaming market, it is a rough time to be in the ad business.

Notables

Notable Earnings Today: Under Armour (NYSE: UAA), APA (Nasdaq: APA), Royal Caribbean Cruises (NYSE: RCL), PayPal (Nasdaq: PYPL), Cheniere Energy (NYSEAMERICAN: LNG), Coinbase Global (Nasdaq: COIN), ConocoPhillips (NYSE: COP), Block (NYSE: SQ), Moderna (Nasdaq: MRNA), MercadoLibre (Nasdaq: MELI), Crocs (Nasdaq: CROX), Warner Bros Discovery (Nasdaq: WBD), Peabody Energy (NYSE: BTU), Twilio (NYSE: TWLO), Datadog (Nasdaq: DDOG), Starbucks (Nasdaq: SBUX), Peloton (Nasdaq: PTON), Carvana (NYSE: CVNA), Nikola Motor ( Nasdaq: NKLA), Cloudflare (NYSE: NET), PENN Entertainment (Nasdaq: PENN), Stem (NYSE: STEM), ADT (NYSE: ADT), AmerisourceBergen (NYSE: ABC), Amgen (Nasdaq: AMGN), Atlas Air Worldwide (Nasdaq: AAWW), Bausch Health (NYSE: BCH), Cigna (NYSE: CI), Cummins (NYSE: CMI), DoorDash (NYSE: DASH), DropBox (Nasdaq: DBX), DXC Technology (NYSE: DXC), El Pollo Loco (Nasdaq: LOCO), EOG Resources (NYSE: EOG), Expedia Groupa (Nasdaq: EXPE), GoPro (Nasdaq: GRPO), Hanesbrands (NYSE: HBI), Kellogg (NYSE: K), Kratos Defense and Security (Nasdaq: KTOS), Marriott International (Nasdaq: MAR), NRG Energy (NYSE: NRG), Papa John’s (Nasdaq: PZZA), Planet Fitnes (NYSE: PLNT), Skyworks (Nasdaq: SWKS), Wayfair (NYSE: W), World Wrestling (NYSE: WWE), Yelp (NYSE: YELP).

Notable IPOs Today: iShares Environmental Infrastructure and Industrials ETF (Nasdaq: EFRA).

Notable Equity Crowdfunding Campaigns Ending Today: Introspective Power (StartEngine).

Notable Economic Events Today: Jobless Claims (8:30 a.m. ET), Exports / Imports (8:30 a.m. ET), Unit Labor Costs (8:30 a.m. ET), Services PMI (9:45 a.m. ET), S&P Global Composite PMI (9:45 a.m. ET), ISM Non-Manufacturing PMI / Employment (10:00 a.m. ET), Factory Orders (10:00 a.m. ET).

Qualcomm’s Outlook Scares Investors

Photo by Anne Nygård / Unsplash

Although Qualcomm (Nasdaq: QCOM) reported positive earnings and revenue in its financial results, shares dropped 7.59% in after-hours trading due to its financial outlook.

Final Thoughts: The company sees a low double-digit percentage decline for its 3G/4G/5G handset volumes due to the macro environment. Large customers are also drawing down on inventory, which Qualcomm said will hurt future earnings.

Booking Holdings Soars Due to Strong Demand

Shares of Booking Holdings (Nasdaq: BKNG) jumped 5.11% in after-hours trading on Wednesday as the travel company reported earnings and revenue that were both better than expected.

Final Thoughts: Despite the macro environment, the company sees improvement in room night growth and travel bookings for early 2023.

Trends to Watch

In the Hood: Robinhood Cuts Losses After Transaction Revenue Drops (The Wall Street Journal)

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