27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
Roku Inc (NASDAQ:ROKU) boasts an "exceptional" streaming video platform, and the company's continued push into the Smart TV category could result in it being an over-the-top advertising leader, according to Wedbush. Yet the stock's risk-reward is balanced, the sell-side firm said Friday.
The Analyst
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
Wedbush's Michael Pachter initiated coverage of Roku with a Neutral rating and $73 price target.
The Thesis
Roku boasts multiple competitive advantages over its peers in the video streaming space, Pachter said in the initiation note. (See his track record here.)
They are:
- Less expensive hardware options.
- A content-agnostic platform.
- A combination of ad-supported and free content.
- An inexpensive operating system compared to peers.
Buy at this blue line for a shot at trading profitably
There are so many indicators out there on when to buy and sell. Nic uses none. He looks at a chart and buys when a stock “pushes” off this blue line. What blue line? Find out on the next page. It’ll change how you make money from stocks. Click here for the details.
Roku is leveraging its strengths to pick up new users on its ecosystem and then drive gross profit growth from higher-margin content distribution fees and advertising revenue, the analyst said.
The company is seeing signs of success in its strategy in the rapid growth of average revenue per user from around $7 per user in the first quarter of 2016 to more than $15 in the second quarter of 2018, Pachter said. The momentum should continue through at least 2020, when Wedbush forecast average revenue per user that exceeds $25.
Wedbush's $73 price target is based on a 4.3 times EV/revenue multiple on 2025 revenue estimates of $3.9 billion discounted back at 10 percent per year. The estimates are already above Street expectations, which implies the stock is "priced to perfection," Pachter said — but all else being equal, investors should build a position in the stock in any pullback, he said.
Price Action
Roku shares were down 0.18 percent at $66.70 at the time of publication Friday.
Related Links:
Should Roku Investors Worry About Amazon's IMDB?
KeyBanc Flips To The Roku Channel For A Happy Narrative
Photo courtesy of Roku.
27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.