Unpacking Q3 Earnings: Roku (NASDAQ:ROKU) In The Context Of Other Consumer Subscription Stocks
Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Roku (NASDAQ:ROKU) and its peers.
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
The 8 consumer subscription stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 2.2% below.
In light of this news, share prices of the companies have held steady as they are up 3.3% on average since the latest earnings results.
Roku (NASDAQ:ROKU)
Spun out from Netflix, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Roku reported revenues of $1.06 billion, up 16.5% year on year. This print exceeded analysts’ expectations by 4.5%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EBITDA estimates.
Roku Total Revenue
Roku scored the biggest analyst estimates beat of the whole group. The company reported 85.5 million monthly active users, up 12.8% year on year. Unsurprisingly, the stock is up 2.5% since reporting and currently trades at $79.53.
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.
Duolingo reported revenues of $192.6 million, up 39.9% year on year, outperforming analysts’ expectations by 1.8%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates.
Duolingo Total Revenue
Duolingo delivered the fastest revenue growth and highest full-year guidance raise among its peers. The company reported 113.1 million users, up 36.1% year on year. The market seems happy with the results as the stock is up 6.6% since reporting. It currently trades at $340.
Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.
Chegg reported revenues of $136.6 million, down 13.5% year on year, exceeding analysts’ expectations by 1.9%. Still, it was a slower quarter as it posted a decline in its users and a significant miss of analysts’ number of services subscribers estimates.
Chegg delivered the slowest revenue growth in the group. The company reported 3.83 million users, down 12.9% year on year. As expected, the stock is down 9.5% since the results and currently trades at $1.61.
Founded by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ:BMBL) is a leading dating app built with women at the center.
Bumble reported revenues of $273.6 million, flat year on year. This print beat analysts’ expectations by 0.7%. Aside from that, it was a mixed quarter as it also logged an impressive beat of analysts’ EBITDA estimates.
The company reported 4.26 million active buyers, up 11.4% year on year. The stock is flat since reporting and currently trades at $7.87.
Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ:MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.
Match Group reported revenues of $895.5 million, up 1.6% year on year. This result missed analysts’ expectations by 0.6%. Overall, it was a slower quarter as it also recorded revenue guidance for next quarter missing analysts’ expectations significantly and a decline in its users.
Match Group had the weakest performance against analyst estimates among its peers. The company reported 15.21 million users, down 3.2% year on year. The stock is down 13.1% since reporting and currently trades at $32.86.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
