Is Roku positioned to win big in the post-inflation economy? The company’s heaviest headwind in recent years is transforming into a tailwind.
I have a long list of reasons to buy Roku (ROKU 2.75%) stock.
The media-streaming innovator’s international market expansion is in a very early stage. The company is growing sales, users, and cash profits at a remarkable pace. Rumor has it that Roku could be a buyout target in 2025. And the stock is staying down despite these pending catalysts, making it an incredible value.
Roku’s secret sauce
I could talk your ear off about any of these potentially stock-boosting catalysts and then some. But I haven’t even mentioned the biggest reason to buy Roku stock yet.
You see, the low stock price largely rests on soft ad sales on Roku’s media-streaming software platform. The weakness is part of a sector-wide downturn in the digital advertising sector, and this distressed industry is on the verge of a huge upswing.
You don’t want to be left empty-handed when this sea change plays out. It may not happen in 2025, but time is running out.
Three steps from plunge to rebound
The path from Roku’s ad-based downturn to a roaring comeback is very simple:
- The inflation crisis put a damper on targeted ad sales in 2022. Why spend big money on effective advertising when no one is ready to buy what you’re promoting?
- Roku’s stock plunged despite strong user growth and a dominant market position. The adtech market’s slump gave Roku bears plenty of tools to hold the stock down — despite consistently strong earnings reports.
- A post-inflation economy should see more consumer spending and give advertisers access to big budgets again. Roku’s large user base and effective ad-spot platform will benefit greatly from this ongoing market refresh.
This is a firm prediction, not a blind guess. Many companies in the online advertising industry are already reporting great revenue growth, signaling a strong recovery. Most of them are not as undervalued as Roku, though. That’s why I recommend Roku’s stock over other digital ad specialists.
Roku will soar in the next two years. You can quote me on that.
