Can Little Roku Stand Up To Big Competitors?
Roku, a tech company which sells both streaming boxes and smart TV interfaces, has launched preliminary plans for its IPO.
Roku is transitioning away from low-margin hardware to high-margin software, which will allow it to become a neutral platform for content publishers.
The company is unprofitable like other tech IPOs, but losses are shrinking and revenue is growing despite intense competition.
In good news for a generally successful 2017 tech IPO market, streaming and hardware company Roku (NASDAQ:ROKU) announced preliminary plans for its IPO. Roku recently filed an S-1 report with the SEC, putting down a placeholder value of $100 million and indicating that it plans to file under the label ROKU. In July, Roku was apparently seeking a valuation of $1 billion.
There are reasons to be skeptical about Roku’s fortunes. The idea that a company with 15.1 million active accounts can be called “little” may seem absurd, but that is the reality which Roku must face as it moves to compete against giants like Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN). And like so many current tech IPOs including the disappointing Snap (NYSE:SNAP), Roku is not profitable and makes no promises to be so in the foreseeable future.
But there are reasons why investors should expect Roku to continue to hold its ground and this IPO to do well. Roku is a company looking to move into the right direction as it transitions from low-margin hardware to high-margin software and is in great position to take advantage of the growing popularity of cord cutting. Investors should listen to Roku about how they will take advantage of new trends in TV streaming and strongly consider this stock.
From Hardware to Software
There are two key elements to Roku’s business. Roku sells boxes which allow customers to stream Netflix (NASDAQ:NFLX) and other streaming services to their televisions. Furthermore, it also licenses software and collects advertising revenue from its investment in India as part of its so-called platform operations.
source: https://seekingalpha.com/article/4104588-can-little-roku-stand-big-competitors
Roku is transitioning away from low-margin hardware to high-margin software, which will allow it to become a neutral platform for content publishers.
The company is unprofitable like other tech IPOs, but losses are shrinking and revenue is growing despite intense competition.
In good news for a generally successful 2017 tech IPO market, streaming and hardware company Roku (NASDAQ:ROKU) announced preliminary plans for its IPO. Roku recently filed an S-1 report with the SEC, putting down a placeholder value of $100 million and indicating that it plans to file under the label ROKU. In July, Roku was apparently seeking a valuation of $1 billion.
There are reasons to be skeptical about Roku’s fortunes. The idea that a company with 15.1 million active accounts can be called “little” may seem absurd, but that is the reality which Roku must face as it moves to compete against giants like Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN). And like so many current tech IPOs including the disappointing Snap (NYSE:SNAP), Roku is not profitable and makes no promises to be so in the foreseeable future.
But there are reasons why investors should expect Roku to continue to hold its ground and this IPO to do well. Roku is a company looking to move into the right direction as it transitions from low-margin hardware to high-margin software and is in great position to take advantage of the growing popularity of cord cutting. Investors should listen to Roku about how they will take advantage of new trends in TV streaming and strongly consider this stock.
From Hardware to Software
There are two key elements to Roku’s business. Roku sells boxes which allow customers to stream Netflix (NASDAQ:NFLX) and other streaming services to their televisions. Furthermore, it also licenses software and collects advertising revenue from its investment in India as part of its so-called platform operations.
source: https://seekingalpha.com/article/4104588-can-little-roku-stand-big-competitors
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