On the cusp of a significant international expansion phase, Roku is growing faster than Neflix at a similar development stage, according to Ralph Schackart, analyst for investment bank William Blair.
“In our view, Roku will experience similar phased stages of international growth as Netflix did during its international expansion,” analyst Ralph Schackart said in a note to clients Tuesday.
“Looking at Roku’s most recent nine quarters against those of Netflix in the beginning stages of Phase II, Roku, on average, achieved 9% quarter-over-quarter growth, compared with Netflix’s average of 8%,” Schackart said.
Roku, which has evolved from merely being a manufacturer of streaming devices for the living room into the operator of one of the two most dominant OTT ecosystems, explosively this year. It’s stock price has more than tripled, and it counted 30.5 million active user accounts as of the end of the second quarter.
Schackhart believes it will reach 80 million active user accounts by 2025.
On November 1, 2011, Netflix stock bottomed out at $9.22 a share. Less than two months earlier, the subscription streaming company began its international expansion to 43 countries and territories in Central and South America, as well as the Caribbean. Brazil became the first Latin American country Netflix launched into, with service starting on September 5, 2011. As of midday trading today on the Nasdaq, Netflix is trading at $289.47 a share.
Notably, Roku—which is currently trading at more than $144 a share—is also prioritizing Brazil in the early phases of its expansion.
Roku’s business is different than Netflix in that it's an ecosystem rather than an app — it’s the milk that holds the cereal, as it might be. But it’s gestating its own content smorgasbord, albeit one that's ad-supported, the Roku Channel. And it has the advantage of not having to produce original content, or be reliant on studio content engines, to keep fueling its growth.