Roku (ROKU), who deals in streaming hardware and content alike with its Roku Channel, has a bit of a problem on its hands in making money. While it can make money selling hardware, it needs to also consider making money after the hardware is bought. To that end, Roku offers up content as well, and sells ads accordingly. The latest ad sales plan did not go over well with viewers. Investors were happy enough, though, and sent shares up nearly 2.5% in the closing minutes of Thursday’s trading.
Roku, not surprisingly, is constantly trying to refine its hardware, though one of its latest changes did not turn out so well in the end. Roku apparently decided to put unskippable ads right into the system at startup. Several people reportedly saw this, and when wondering if it was some kind of glitch in the system, discovered that several others saw the exact same thing, and realized, this was planned.
The move was widely regarded as a bad idea. One user shared the experience noting: “Considering my options for jumping ship now.” Another noted that they already owned three Roku stick and two entire Roku televisions, but if this kept up they would not be buying any further devices from Roku. Reports from Roku itself noted that the new ad was just a test, and based on the downright vociferous response, Roku will likely be ditching that ad spot lest people start ditching Roku instead.
The New Monster Jam Partnership
For those not familiar, Monster Jam is a major motorsports operation, one of the biggest and most exciting such spectacles around. And Roku is now a big part of Monster Jam, as the Monster Jam free ad-supported television (FAST) platform will now be available on Roku.
We all know that a lot of streaming services have been turning to live sports in recent months to draw interest, and this is no different for Roku. It is also one of the first times yet we have heard about a motorsports operation getting involved with a streaming provider. This may give Roku a bit of a first-mover advantage, at least for a while.
Is ROKU Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ROKU stock based on 12 Buys, nine Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 15.6% rally in its share price over the past year, the average ROKU price target of $105.68 per share implies 43.24% upside potential.
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