Roku (NASDAQ:ROKU)
On Monday, Roku (NASDAQ:ROKU) stock had fallen by 4%, underperforming the broader market’s 0.2% drop. The decline compounded what had already been a challenging year for those who had invested in the digital streaming service platform. The price of Roku stock has dropped by 78% in 2022.
Wall Street’s pessimism about the digital advertising sector may have contributed to the downturn on Monday.
What’s the Reason?
Meta stock dropped early Monday after the company was downgraded in anticipation of its earnings report due later this week. Since the firm’s digital advertising revenue has been sluggish in previous quarters, investors are concerned about what the corporation would say about the situation.
Roku stock price has fallen in tandem with Facebook’s owner because the company relies heavily on digital advertising to generate income.
Particular concerns have been voiced by investors regarding Roku’s impending earnings report for the third quarter, which is scheduled for early November. The firm said that the second quarter was challenging due to decreased expenditure on streaming video hardware and advertising. Roku’s third-quarter announcement, scheduled on November 2, might have equally negative commentary from company executives.
What’s Next?
Keep an eye on that announcement next week for clues that Roku’s business is beginning to stabilize. If things were stable, we wouldn’t have seen a decline in streaming hours as we saw in the previous quarter. As of late 2022, Roku will need to see a pick-up in advertising expenditure and sales of its streaming devices to drive growth.
Meanwhile, investors are preparing for another quarter of declining growth, with revenue increases expected to settle at 6% in Q3 compared to 18% in Q2.
Even if these drops don’t pose a danger to the optimistic investment thesis, they do increase the likelihood of short-term volatility in Roku stock as Wall Street attempts to estimate the timing of any return in the digital ad industry.
Meta Description
On Monday morning, Roku stock went down with those of Meta Platforms.
Featured Image – Megapixl © Rafaelhenriquepress
Author Shariq Khan 
