Reviewing Roku (ROKU) and Its Competitors

Roku (NASDAQ:ROKU) is one of 184 public companies in the “Entertainment” industry, but how does it compare to its competitors? We will compare Roku to related companies based on the strength of its dividends, profitability, risk, institutional ownership, analyst recommendations, earnings and valuation.

Risk & Volatility

Roku has a beta of 2.12, meaning that its share price is 112% more volatile than the S&P 500. Comparatively, Roku’s competitors have a beta of 1.00, meaning that their average share price is 0% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Roku and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Roku	0	18	8	1	2.37
Roku Competitors	1876	4506	9617	255	2.51

Roku presently has a consensus price target of $156.17, suggesting a potential downside of 2.62%. As a group, “Entertainment” companies have a potential upside of 19.66%. Given Roku’s competitors stronger consensus rating and higher possible upside, analysts plainly believe Roku has less favorable growth aspects than its competitors.

Valuation & Earnings

This table compares Roku and its competitors revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Roku	$4.74 billion	$88.36 million	47.45
Roku Competitors	$6.00 billion	$73.17 million	14.23

Roku’s competitors have higher revenue, but lower earnings than Roku. Roku is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Roku and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Roku	9.34%	18.65%	11.41%
Roku Competitors	11.06%	-25.84%	-2.42%

Institutional and Insider Ownership

86.3% of Roku shares are held by institutional investors. Comparatively, 36.3% of shares of all “Entertainment” companies are held by institutional investors. 13.4% of Roku shares are held by company insiders. Comparatively, 23.9% of shares of all “Entertainment” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Roku beats its competitors on 7 of the 13 factors compared.

About Roku

Roku, Inc., together with its subsidiaries, operates a TV streaming platform in the United states and internationally. The company operates in two segments, Platform and Devices. Its streaming platform allows users to find and access TV shows, movies, news, sports, and others. The Platform segment offers digital advertising, including direct and programmatic video advertising, media and entertainment promotional spending, and related services; and streaming services distribution, such as subscription and transaction revenue shares, and sale of premium subscriptions and branded app buttons on remote controls. The Devices segment provides sale of streaming players, Roku-branded TVs, smart home products and services, audio products, and related accessories as well as licensing arrangements with service operators. Roku, Inc. was incorporated in 2002 and is headquartered in San Jose, California.