Why Cathie Wood Is Still Buying Roku After Q2 Earnings Miss

Why Cathie Wood Is Still Buying Roku After Q2 Earnings Miss
One of the favorite stocks of Cathie Wood and Ark Funds is Roku Inc (NASDAQ:ROKU). Herea??s what Wood had to say this weekend about the streaming hardware and platform company.

What Happened: Roku shares were down 23% on Friday after a second quarter earnings report that saw revenue and earnings per share both miss Street estimates. The company also withdrew full-year revenue guidance due to a weakness in advertising budgets.

a??In our view, the third-quarter guidance is conservative, as Roku reported more than $1 billion in ad commitments during the yeara??s upfront selling season, representing approximately 16% of upfront CTV ad spend and 5% of total upfront add spend,a?? Wood said.

Wood said the new third quarter guidance suggests the company sees a??little-to-no revenue capture from the scatter marketa?? for the upcoming television year.

a??Although macroeconomic headwinds are compelling advertisers to tighten their ad budgets, we believe ad spend on CTV should continue to grow as consumers defect from linear TV.a??
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