The stock has had its ups and downs in the past year, but 's (NASDAQ: ROKU) trajectory has mainly been in just one direction lately. Shares are down a brutal 80% since setting their pandemic highs in early 2021 and have declined over 20% following the streaming video specialist's Q4 earnings update in early February. Industry peer Netflix (NASDAQ: NFLX), on the other hand, is beating the market in the past year, suggesting there are weaknesses in Roku's business approach or in its engagement trends.

Declines of that magnitude often reflect serious challenges for a company that's aiming to build sustainably positive earnings. But in some cases, a drop like that could lay the groundwork for a market-thumping rebound once the business recovers its past momentum. Does Roku fit more into the bearish or the bullish category? Let's take a closer look.

It's not hard to find reasons to feel pessimistic about this business right now. Roku's expansion trajectory is decelerating toward the single digits, for example, threatening its status as a growth stock. Revenue was up 11% in 2023 compared to the prior year's 13% increase and the 50%-plus gain in each of the previous three years.

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Source Fool.com