Roku (ROKU) has made a great name for itself in both home theater hardware and content provision, giving it access to the entire home entertainment spectrum. But there are some concerns rising suggesting that Roku’s position may be starting to erode. That sent shares down modestly in the closing minutes of Friday’s trading.
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New reports say that Roku’s hardware revenue has been in decline for some time now. The second quarter alone saw device revenue drop 6%, as a combination of tariffs on devices and rising competition from other major streaming operations stepped in. Moreover, households saw little reason to upgrade their Roku devices, so that revenue stream was likewise lost.
However, Roku is responding to this by pivoting its product mix. Instead of viewing hardware as a major revenue driver, it is now considered, reports note, a “strategic gateway.” This makes sense. If Roku views hardware as a means to connect users to its content, rather than as a big part of revenue, it stops competing quite so hard and opens up other platforms to host its content as well.
About That Hardware
With this concept in mind, two key points came out about Roku hardware that should be considered. First, Roku is offering up its Streaming Stick at “its lowest price ever for Labor Day,” one report noted. Since it plugs into your television’s HDMI slot, and draws power from USB, there is no need for an additional corded power supply. The reports also note it is available on Amazon for $29.
Meanwhile, for those who already have Roku devices and find the Back button an issue, there is a fix from Roku. Roku recommends a simple system restart, which can be reached from the Settings menu, then the System function, then Power, and finally, System Restart. Some Roku devices will not have a Power function, but rather offer the System Restart as part of the System function, reports note.
Is ROKU Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ROKU stock based on 15 Buys, seven Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 43.93% rally in its share price over the past year, the average ROKU price target of $76.14 per share implies 22.35% upside potential.
