Those who follow video streamers likely think of Roku (ROKU) primarily as a hardware company or, at best, a minor player in the streaming video market. But Roku has made a lot of inroads, albeit quietly, in the last few years. Now, it is effectively a powerhouse in the market, and that was enough to send Roku shares up fractionally in Wednesday afternoon’s trading.
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Streaming represented 41.4% of all television viewing in the United States just in July, according to The Gauge, a Nielsen report. And while the growth rate of streaming has slowed compared to previous years, it is still growing, which is making it a significant threat to linear television—cable and broadcast alike—in general. You can also refer to the recent massive write-downs of linear television seen at Paramount (PARA) and Warner Bros. Discovery (WBD) for a greater perspective on that.
That is where the concept of free ad-supported television (FAST) is taking off, and there are two platforms leading right now: Tubi and The Roku Channel. In fact, The Roku Channel represents 1.6% of all total viewing time, while Paramount+ is 1.1%, and Tubi and Disney+ both sit at 2.1%. Interestingly, Tubi grew its share by 0.7%, which matched Netflix’s growth, while The Roku Channel was right behind with a 0.6% increase.
Disabled Channels?
In a separate development, some Roku users may have recently noticed that their old favorite channels are no longer accessible. That may prove irksome, but reports suggest there is a way around this. Getting a disabled channel back is apparently as easy as requesting it back.
The latest reports note that this particularly impacts Fubo (FUBO) subscribers. Since Fubo does not have a free subscription, Fubo must, in turn, pay for the channels requested, even if viewers are not watching them. Thus, those who are not watching are not generating revenue, and Fubo is cutting them off accordingly. Therefore, reactivating any lost channels should bring the channel in question right back.
Is ROKU Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ROKU stock based on eight Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 21.09% loss in its share price over the past year, the average ROKU price target of $76.14 per share implies 22.35% upside potential.
