When Roku (ROKU -2.19%) reported fiscal 2022 second-quarter results after the markets closed on Thursday, July 28, investors were disappointed. The streaming content enabler extended its consecutive quarterly streak of gross losses in its player segment.

That wasn't the only bad news, and the stock fell 23% on the day following the report. Roku has struggled ever since the economic reopening gained momentum in 2021. The company thrived at the pandemic's onset when millions of folks sought in-home entertainment options.

Let's evaluate Roku's second quarter and determine whether it can turn things around anytime soon.

Pressure from all sides

In its second quarter, which ended on June 30, Roku's revenue expanded by 18% to $764 million. The company's revenue growth rate peaked at 81% in the quarter ended in June 2021 and has decelerated every quarter since then.

Unfortunately, management expects these revenue headwinds to continue, saying in the earnings announcement: "Consumers began to moderate discretionary spend, and advertisers significantly curtailed spend in the ad scatter market (TV ads bought during the quarter). We expect these challenges to continue in the near term as economic concerns pressure markets worldwide."

To make matters worse, costs are rising at Roku. Supply chain disruptions have made securing the supplies it needs to serve customers more challenging. Many businesses have decided to pass higher costs along to consumers to protect their profit margins.

Roku's management has taken an alternative route: It chose to absorb higher costs. As a result, Roku's player segment has reported a gross loss for five consecutive quarters. The loss in Q2 of $22 million was considerably higher than the loss of $6.7 million in the same quarter last year, even while sales in the player segment fell to $91 million from $113 million in that same time.

Roku is willing to take a loss in the player segment because its other segment -- its streaming platform -- is so profitable. In the quarter ended in June, the platform segment earned $377 million in gross profit, up from $345 million in Q2 last year. Therefore, even though it took a gross profit loss in the player segment, its overall gross profit increased from $338 million to $355 million.

But there is bad news on that front as well. Management forecasts a total gross profit of $325 million in the upcoming quarter. If it meets that target, it would be a decrease from the $364 million in total gross profit it earned in the same period the prior year.

Roku makes a large part of its revenue when consumers are shown advertisements while watching programming on the Roku platform. Macroeconomic headwinds, including rising inflation, the war in Ukraine, and supply chain shortages, have caused marketers to pull back on spending. That decrease in sales is combining with Roku's higher costs to pressure overall gross profits.

Still not cheap

ROKU PE Ratio Chart

ROKU PE Ratio data by YCharts.

Roku is trading at a price-to-earnings ratio of 67, which, even though it's as low as it's been in years, is not cheap on an absolute basis. Given the headwinds and the valuation, it's possible Roku's stock has more downside from here.