Please ensure Javascript is enabled for purposes of website accessibility

Why Roku Shares Plunged Today

By Evan Niu, CFA - Feb 22, 2018 at 12:58PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

First-quarter guidance fell short.

What happened

Shares of Roku (ROKU 2.15%) have plunged today, down by 16% as of 12:30 p.m. EST, after the company reported fourth-quarter earnings. Guidance for the first quarter left a little to be desired.

So what

Revenue in the fourth quarter came in at $188.3 million, topping the consensus estimate of $182.5 million. Net income was $6.9 million, or $0.06 per share, while analysts were expecting the company to lose $0.10 per share. Active accounts grew to 19.3 million by the end of the quarter, and Roku streamed 4.3 billion hours during the quarter.

The Roku Channel on a TV

Image source: Roku.

Average revenue per user (ARPU) was $13.78 on a trailing-12-month basis.

Now what

While the fourth-quarter results topped expectations, guidance for the first quarter fell short. Roku expects first-quarter revenue to be in the range of $120 million to $130 million, with a net loss of $15 million to $21 million. Analysts had been modeling for $132 million in revenue for the first quarter. Adjusted EBITDA in the first quarter is expected to be negative $10 million to negative $16 million.

For the full-year 2018, Roku expects total revenue of $660 million to $690 million, with a net loss of $40 million to $55 million. Adjusted EBITDA for the year should be negative $10 million to negative $25 million.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Roku Stock Quote
Roku
ROKU
$83.91 (2.15%) $1.77

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.