Welcome to IDI Capital. Today, let’s talk about two stocks that must be purchased for video-streaming services: Disney and Roku.
Like many entertainment and travel companies, Disney struggled to close many theme parks during the COVID-19 pandemic. The coronavirus pandemic has hurt Disney’s operating income by $2.4 billion.
However, Disney+ is now Disney’s savior. It expects 230 to 260 million subscribers to join Disney+ by 2024. The 2024 goal for all of Disney’s video-streaming services is more than 300 million subscribers. In addition, it plans to increase the subscription fee by $1 to $7.99 per month.
On the other hand, compared to Disney+, Netflix is now the market leader with 195 million subscribers, remarkable pricing power, and consistent growth in international markets.
But Roku’s future high growing potential is more attractive to us.
Roku runs a totally different advertising business model by helping users avoid logging in to different streaming platforms to view different content, Roku allows users to watch paid and free content from the internet such as Netflix, Amazon, Hulu, YouTube, etc. The only thing Roku streaming devices and TV needs is an internet connection to get going.
Like all other stocks, this one was pressured lower in February and March after the coronavirus made landfall in the U.S. From peak to trough, Roku tumbled more than 60%. The stock’s 450% rally from its March bottom, however, ultimately led to a gain of 137% for the year. A $1,000 investment made in Roku on the first trading day of this year would now be worth a whopping $2,367.
Stay-at-home efforts meant to curb the coronavirus turned out to be a boon for Roku. Through the third quarter ending in September, year-to-date revenue of $1.13 billion was up 57% year over year. Revenue from sales of devices was higher by 40%. Platform revenue was higher to the tune of 65% through the first three quarters of the year.
At IDI Capital, we predict future values with innovative algorithms. If you invest $100 in Disney With a 5-year investment, the revenue is expected to be around +12.65%. Your current $100 investment may be up to $112.65 in 2025.
“ROKU” stock price is about $680. With a 5-year investment, the revenue is expected to be around +105.82%. Your current $100 investment may be up to $205.82 in 2025.
Forget the numbers of prices, Focus on the power of growth.
This is Dr. John Liao’s analysis at IDI Capital, welcome to follow and subscribe.