How to buy Roku stock
For consumers looking to steer away from the confinements cable television companies, they are turning their attention to streaming video platforms, like ROKU. For as long as consumers continue to make the switch, Roku and its investors stand to gain.
Roku is the world’s leading streaming device company with over 30 million accounts and high growth. As more consumers shift from traditional cable to streaming content, Roku is well-positioned to gain market share and return long-term value to shareholders. If ROKU can continue to gain market share and develop its main revenue segments, shareholders will have lots to look forward to.
How do I invest in Roku?
Roku stock is listed on NASDAQ under the symbol ROKU with the IPO price of $14 per share. Roku’s common stock can be purchased on the open market through any registered broker. There are two different types of brokerage accounts: discount online brokers and full-service brokers. The cheapest option is to open a discount brokerage account because they charge lower trade commissions, lower overall fees, and make things easier for the average investor. If you want to get started with a little bit of money and $0 trading commissions, then you can purchase shares of Roku using Robinhood, Ally Invest, Robinhood and eToro.
Is Roku a good investment?
One of the compelling reasons to own Roku stock is they are a pioneer in the video streaming industry and make video streaming content easily accessible for consumers. Estimates show the average U.S. household streams 3 hours of content on Roku daily. Not only that, but ARPU (Average Revenue Per User) is over $20 and steadily increasing. By the end of the third quarter, there were over fifty-six million active accounts registered to Roku and its streaming service. The majority of this growth has come from the North American market, mainly among Americans and Canadians. In fact, Roku is growing faster than Netfix did at the same stage in its growth cycle. However, due to recent performance, many investors are worried about Roku stock being overvalued. In the short term, we may see a correction in share price but there is still lots of upsides left in the shares over the long term.
Cable TV was once the most sought after media around. Well, the times have changed now! Consumers are moving away from traditional cable TV and adopting the video streaming model. That’s why companies like Disney and HBO are rushing to launch their own streaming networks. Roku is in a great spot because they allow households to connect their favorite video streaming platforms in one place. You can watch Netflix, ESPN or any other content from one dashboard. This technology is fairly new and most new technology receives pushback just like when Steve Jobs launched the iPod and iPhone.
Is ROKU a good stock to buy right now?
The company's shares saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$334 and falling to the lows of US$148. A question to answer is whether Roku's current trading price of US$151 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy?
The price-to-earnings ratio of 71x is currently well above the industry average of 30.82x, meaning that it is trading at a more expensive price relative to its peers. This means it is likely that there is no more upside from mispricing. But Roku's share price is fairly volatile. This could mean the price can sink lower, giving investors a better opportunity to enter into the stock, and potentially buy at a lower price.
Should you buy and hold Roku stock for long term?
According to research firm Omdia, connected TV ad revenue will surpass $120 billion by 2024. Streaming is only going to rise, while cable TV declines, and throughout that journey, Roku will continue to accelerate in the industry’s slipstream. That puts Roku in a well-positioned to capitalize on that opportunity.
For long-term investors, buying into Roku stock is a good deal but only if the investor opts to stay in it for the long haul and choose an aggressive trading pattern. Near-term disruptions may limit the upside over the next few months, but eventually the stock should start trending higher as the longer-term market opportunity is realized.
