Market Overview

Needham's Laura Martin Offers A Few Reasons Roku Shouldn't Be Affected By Amazon's Apple TV, Chromecast Offering

Needham's Laura Martin Offers A Few Reasons Roku Shouldn't Be Affected By Amazon's Apple TV, Chromecast Offering
Related ROKU
Roku Under Selling Pressure Amid Report TCL Is Shifting Its Business
Benzinga's Top Upgrades, Downgrades For December 3, 2018
Roku -6% as lead OEM partner TCL shifts away from consumer TVs (Seeking Alpha), Inc. (NASDAQ: AMZN)’s reintroduction of Apple Inc. (NASDAQ: AAPL) and Alphabet Inc (NASDAQ: GOOGL) video streaming devices prompted a sharp selloff in Roku Inc (NASDAQ: ROKU) Thursday (though the stock moved up 13 percent Friday).

Some bullish experts were undeterred by the news.

There Are Better Channels

Needham analyst Laura Martin suggested Amazon is not necessarily a critical channel for the product category. By her estimates, consumers are more inclined to shop for video streamers at brick-and-mortar retailers rather than online.

“My gut feeling is that a lot of these devices are sold at Best Buy Co Inc (NYSE: BBY),” Martin told Benzinga in a phone interview Friday.

Roku Is More Than A Device

Roku’s revenue isn't entirely dependent on the device and is partly composed of streaming services, which are seen to be similarly unaffected by Amazon’s product sales.

Martin posited that 800,000 of Roku’s 1.6 million subs sold last quarter were attributed not to Roku hardware but to TVs sold with the platform built in.

The Timing Is A Bit Late

Additionally, the timing isn’t necessarily to Apple or Google’s advantage. The pair likely intended to leverage holiday interest and online shopping surges to boost their biggest quarter, but Martin intimated that they may have taken too long to make their move.

“They’ve got 10 days before Christmas, so good for them that they got this done before Christmas, but it’s 10 days,” she said.

They Don’t Compete, Anyway

At the same time, Martin doesn’t consider Apple TV and Chromecast to directly compete with Roku.

“Apple TV is a really different target market,” she said, comparing its $100-plus price against Roku’s $23 to $49. “There’s really no overlap with Roku purchasers.”

Taylor Cox contributed reporting.

Related Links:

Citron Calls Roku A 'Total Joke'

Here's Why Roku's Volatility Is OK With This Equity Strategist

Image Credit: Mattnad - Own work, CC BY-SA 3.0, via Wikimedia Commons

Posted-In: Apple TV ChromecastAnalyst Color Short Sellers Top Stories Exclusives Tech Interview Best of Benzinga


Related Articles (AAPL + AMZN)

View Comments and Join the Discussion!

Latest Ratings

TVPTImperial CapitalDowngrades15.8
ACORGoldman SachsDowngrades10.0
BCOVB. Riley FBRUpgrades12.0
CAMPFirst AnalysisDowngrades22.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Vetr Downgrades Twitter

UBS: Life Storage Has Disconnect Between Growth, Valuation