Roku normally takes 30% of advertising revenue from its streaming partners, so the proliferation and growth of advertising tiers across Netflix, Disney, and Amazon should help the firm. As traditional media businesses trim costs to boost streaming revenues, media and entertainment (M&E) ad expenditure is falling, but that will normalize.
Roku has lowered expenses following numerous rounds of layoffs, paving the way for profitability as advertising demand rises. Even if the stock tripled by 2030, it would be far below its epidemic peak. Roku has a high growth ceiling, and the time is opportune to capitalize on it.
The latest coffee trend is real. Dutch Brothers' Jennifer Saibil: Oregon-based Dutch Bros is a modest but growing coffee brand with outlets largely in the West. Today, it's opening stores quickly in other places, and its model is appealing to people in 16 states.
It opened 159 stores in 2023, exceeding its 150-store goal for 831. It wants to open 165 outlets this year and expects 4,000 by 2030. These new locations offer years of growth for Dutch Bros, which is growing revenue rapidly.
In addition to sales growth, a healthy company needs comparative sales (comps) growth to survive and develop. To offset inflation, Dutch Bros raised pricing as comps growth slowed.
Management believes their fortressing approach, which involves constructing a flurry of new stores in one location to boost brand awareness and attract new customers, lowers comps in the short run. Watch this, but it has begun accelerating again, rising 5% year over year in the 2023 fourth quarter. Sales rose 26% year-over-year in the quarter.
Dutch Bros is moving closer to profitability. It made $10 million throughout the full year after losing last year, but lost $3.8 million in the fourth quarter. The founder-CEO recently handed over the reins to a food industry expert to grow the company. Fast-growing organizations need diverse operations to grow and become profitable at scale. This is a smart expansion strategy that benefits shareholders.
Dutch Bros stock is flat year-to-date. Investors may wait for the next report to act. Dutch Bros will develop and reward stockholders in the next years, regardless of the near circumstances.
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