The shares of Roku are down by more than 26% today after the company reported its fourth-quarter earnings.
Streaming platform Roku reported its earnings for the fourth quarter of 2021. The company’s revenue fell way below analysts’ estimates and this has led to the stock price suffering huge losses.
The Q4 revenue was $865.3 million, way below the $894 million market experts had expected. The earnings were 17 cents per share, adjusted, vs. 9 cents per share as expected by analysts.
The company’s revenue grew by 33% year-over-year in the fourth quarter. This is low compared to the 51% growth in the third quarter and 81% in the second quarter of last year.
Following the poor earnings report, ROKU has lost 26% over the past 24 hours. At press time, ROKU is trading at $106 per share. The recent poor performance could be on track to be the worst day ever for the stock.
ROKU lost 22% of its value in a day on November 8, 2018. If the current loss percentage is maintained, today would become the company’s worst day ever in the stock market.
In the current quarter, the company said it expects to generate $720 million, resulting in a 25% revenue growth. Meanwhile, market analysts expect Roku to generate over $748 million in the first quarter of 2022.
Pivotal Research analyst Jeffrey Wlodarcza said most analysts had decreased the company’s ratings from a HOLD to a SELL. he said;
“The bottom line is with increasing competition, a potential significantly weakening global economy, a market that is NOT rewarding non-profitable tech names with long pathways to profitability and our new target price we are reducing our rating on ROKU from HOLD to SELL.”
Anthony Wood, Roku’s founder and CEO, said the company’s performance could still stay below the pre-pandemic levels and that could affect its performance. He said;
“Overall TV unit sales are likely to remain below pre-Covid levels, which could affect our active account growth. On the monetization side, delayed ad spend in verticals most impacted by supply/demand imbalances may continue into 2022.”
