Netflix Stock or Roku Stock: Analysis

Netflix stock NASDAQ:NFLX

Netflix stock was trading at $223.30 as of 12:57 PM

Streaming video stocks have been discounted heavily in 2022. Wall Street is anxious about profit pressure over the coming year due to a growth hangover. A brief dip could lead to great returns for those willing to ride through the upheaval. Let’s compare Netflix stock (NASDAQ:NFLX) and Roku stock (NASDAQ:ROKU) to see which appears better today.

Netflix Forecast

Neither company appears like a growth stock. Netflix just recorded two straight quarters of subscriber declines, and revenue growth is below 5%. Roku’s sales growth is faster but weaker. Last quarter’s 18% revenue growth continued the company’s four-quarter slump.

Netflix’s earnings are up attributable to scale economies. The corporation remains profitable and generates cash. Roku’s operating cash flow has become negative in the last six months. These issues won’t vanish immediately. In late July, management predicted adjusted third-quarter losses. Roku doesn’t anticipate its streaming video devices or advertising services rebounding quickly. In July, officials claimed less consumer discretionary spending was hurting TV and player sales.

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Netflix’s Shortcut

Netflix (NASDAQ:NFLX) has various reasons to favor a resurgence, including its lack of hardware exposure. According to management, the current quarter should see a return to subscriber gains. Roku’s management lowered its 2022 projection due to short-term concerns. Netflix’s advertising, gaming, and password restrictions are all promising growth areas. Most Wall Street analysts expect Netflix’s yearly sales to rise by 7% in 2022, below the 20% it targeted in recent years but still strong.

Netflix Stock Outlook Against Roku

Given Netflix stock’s improved outlook, both streaming video companies are valued similarly. Netflix’s P/S ratio is 3.5, while Roku’s is 3.1. Both stocks are down 50% in 2022. These equities’ gloomy pricing indicates investors should experience great returns. Netflix (NASDAQ:NFLX) and Roku (NASDAQ:ROKU) are leading platforms with tremendous prospects for expansion in the streaming video sector.

Featured Image-  Megapixl @ M-sur

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About the author: I'm a financial freelance writer keen on the latest market developments which i articulate with writing stock updates, press releases and investor news. As a person i live by the code of a sustainable human existence and a carbon neutral universe. When off work, i spend time reading non-fiction books, flying drones, and outdoor cycling.