Better Buy: Roku vs. Warner Bros. Discovery

The streaming video market is more competitive than ever before. Roku (NASDAQ: ROKU) and Warner Bros. Discovery (NASDAQ: WBD) are two companies in the space with wildly different business models, but which stock will do better for your portfolio? Read on to see why two Motley Fool contributors come down on different sides of the debate. 

Parkev Tatevosian: My investment thesis for investing in Roku is based on the structural advantages streaming holds over cable. Roku partners with manufacturers to sell TVs enabled with the Roku operating system. Once in the ecosystem, Roku takes a percentage of all consumer transactions on the platform. Furthermore, Roku earns a portion of the ad revenue from users on the Roku operating system. 

Already, Roku has the top streaming operating system in the U.S. In the process, Roku has gained 61.3 million active accounts as of March 31, a 7.7 million increase from the same time in the previous year. Its average revenue per user (ARPU) in the quarter that ended in March increased to $42.91 from $32.14 the year before. Roku is adding millions of new customers and earning more from each one. It's net revenue has risen to $2.8 billion in 2021, from $513 million in 2017.

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Source Fool.com