Roku Vs. Comcast: Which Stock Is A Better Buy?

: ROKU | Roku, Inc. -  News, Ratings, and Charts

Roku (ROKU) and Comcast Corporation (CMCSA) are two of the top publicly traded companies in the entertainment industry. However, the companies offer unique products and services with their own nuanced merits.

There is an argument to be made that both of these entertainment powerhouses belong in your portfolio. However, those who perform a deep dive into each stock are likely to favor one over the other. Let’s take a look at whether ROKU or CMCSA is the better play.

The Case for ROKU

ROKU is at the forefront of the streaming industry. Aside from its ROKU device that facilitates streaming, the company also sells its own TVs that simplify the streaming process, especially for those who don’t have extensive tech knowledge. ROKU also has partnerships with plenty of TV-makers, ranging from Sharp to JVC and TCL. Furthermore, the ROKU OS is licensed to some operators to boot.

Though the average analyst price target for ROKU is $290.50, which indicates a potential 16% downside, 12 out of 19 analysts who cover the stock recommend investors buy it. Six of the analysts advise holding. Only one recommends selling. Recently priced at $347, ROKU is only $16 or so away from its 52-week high of $363.44, yet there is no reason why the stock can’t break through this barrier and establish a new high.

The world is shifting toward streaming services while cutting the cord on cable TV, ultimately benefiting companies like ROKU. In fact, ROKU recently announced it has a record number of active accounts. Add in the fact that ROKU’s brass reported an increasing number of streaming hours per customer on its platform to end the fourth quarter of 2020, and there is even more reason to be bullish about the stock.

All in all, ROKU had slightly more than 51 million active accounts at the end of the latest financial quarter. The company is enjoying year-over-year growth of 55% in the fourth quarter and for the entire year.

Even if people start spending more time outdoors in the spring when more of the population is vaccinated, ROKU will benefit from habits ingrained in its customer base throughout the pandemic, ultimately holding onto many of these customers for years or even decades. If you still aren’t convinced ROKU is a solid investment, look no further than the reacceleration of monetized advertisements on the company’s platform.

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