Roku (NASDAQ: ROKU) the internet streaming platform reported solid Q1 2020 results, however the market still shuns its rich valuation.  The stock is down -5% after hours.

Revenue came in at $320.8 million, which beat analyst estimates of $309.2 million (+4% vs consensus).

EBITDA came in at $-16.3 million, beating analyst estimates of $-21.6 million.

EPS came in at $-0.45,  which was in-line with analyst estimates.

Roku added had 39.8 million active accounts in the quarter (+37% y/y), streaming hours were 13.2 billion (+49% y/y) and ARPU (average revenue per user) came in at $24.35 (+28% y/y).

On April 13th the company had provided guidance to the market that it was expecting Active Accounts to be 39.8MM and that the COVID-19 had resulted in an acceleration of active account growth.

Roku has meaningful underperformed it’s big streaming peer – Netflix on a year-to-date basis, Netflix is up 35% vs. Roku up 3%.  Both companies have benefited from the stay-at-home regulation related to COVID-19.

Year-to-date Performance

Source: YCharts

Roku trades at a 37% premium to Netflix (10.7x P/S vs. 7.8x P/S respectively) – a rich price tag for a platform that is so far behind the Netflix in terms of content and reach.

Forward Price-to-Sales

Source: YCharts

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