This One and Only Red Flag in Roku's Q4 Report Is Still a Biggie for Investors
By most accounts, Roku's (NASDAQ: ROKU) fourth-quarter earnings report was a pleasant surprise. Admittedly, the top line only improved by a fraction of a percent, and the company suffered an operating loss. But the loss was smaller than anticipated and revenue guidance for the current quarter was better than expected. Shares surged following Wednesday's post-close release of the quarterly figures.
To get at the real news in the report though, investors should look past the revenue numbers. They should instead focus on how much spending the company did last quarter to produce what was paltry sales growth and on what will likely be a sales decline for the current quarter.
Management is still optimistic about the long-term profitability of the business. But winning new customers only becomes more difficult and more expensive as a market becomes more saturated. Shareholders have every reason to start asking tougher questions here.
Source Fool.com
