Struggling Shares Worth Considering for Long-Term Investment
Investing in stocks that have underperformed the market for a while can be a wise move if their long-term prospects are promising. Two such stocks are Roku and Fiverr, both of which have lagged behind the S&P 500 in recent years but show signs of promising growth.
Roku: A Streaming Giant in the Making
Roku, a pioneer in the connected TV space, has struggled due to slowing revenue growth and net recurring losses. Yet, the future of entertainment is streaming, and Roku is perfectly positioned to capitalize on this trend. With over 200 video streaming options available, Roku is a facilitator that connects viewers to their favorite streaming services.
Cable isn't dead yet, but it's losing ground to streaming. Roku, backed by its vast user base, has the potential to profit from this shift. Its platform segment, responsible for advertising and content-related revenue, is already profitable, boasting impressive 50%-range gross margins.
While international markets present a challenge due to lower monetization efforts, Roku's strategy in North America has proven successful. The company's growing streaming households and engagement, coupled with stronger revenue growth in international markets, could lead to improving profits as its platform segment becomes a more significant part of its bottom line.
Fiverr: The Future of the Gig Economy
Fiverr operates in the modern gig economy, helping connect freelancers with companies or individuals seeking their services. Despite poor performance this year and over the past three years, Fiverr is an intriguing long-term investment opportunity.
The company is becoming more disciplined and has managed to turn a profit in recent quarters, despite slowing revenue growth. Artificial Intelligence (AI) is ensuring the gig economy's continuance, and Fiverr is well-positioned to capitalize on this trend. The company can provide businesses with AI experts without the high expense of hiring full-time employees.
The gig economy is projected to grow, providing a tailwind to Fiverr. Its long-term addressable market is estimated at $247 billion, suggesting plenty of room for growth – even with competition. Fiverr's recent acquisition of dropshipping specialist AutoDS increases its long-term addressable market, further solidifying its place in the gig economy.
Enrichment data reveals that Roku's robust growth trajectory will be fueled by its position as the dominant streaming platform provider in North America, a strong shift towards Connected TV (CTV) advertising, potential margin expansion, and impressive long-term stock price projections.
On the other hand, while Fiverr faces challenges in the competitive freelance services market, its long-term growth prospects are promising due to increasing demand for digital services. However, specific long-term stock price forecasts are not available for Fiverr, and the company needs to navigate the market effectively to realize sustained growth.
[1] Roku (ROKU) Long-Term Growth Prospects: Market research and analysis sources including Bernstein, Morgan Stanley, and Citi.[3] Roku (ROKU) Long-Term Stock Price Forecasts: CFRA and Wells Fargo equity research reports.
Investing in Roku's underperforming stock could yield significant returns in the future, given its strong position in the North American streaming market and promising growth trajectory. The company's robust long-term stock price projections, as suggested by reports from Bernstein, Morgan Stanley, and Citi, further support this view.
Fiverr, despite its recent underperformance, is also an appealing long-term investment due to the growing demand for digital services in the gig economy. With its acquisition of AutoDS and the role of AI in guaranteeing the gig economy's continuance, Fiverr is well-positioned to capitalize on this trend, as indicated by recent reports from analysts. However, specific long-term stock price forecasts for Fiverr are not readily available, highlighting the importance of careful analysis and strategic investing.
