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Tae Kim

Roku Isn’t the Coronavirus Play Netflix Is

The two companies have video streaming in common, but Roku’s heavy reliance on ads makes it particularly vulnerable now.

Roku beat its sales guidance, but its outlook is too cloudy to call.

Roku beat its sales guidance, but its outlook is too cloudy to call.

Photographer: Monica Schipper/Getty Images North America

With Netflix Inc. soaring to new highs, it may be tempting to think video-streaming platform Roku Inc. might be the next big stay-at-home play amid heightened demand  for viewing options in a coronavirus world. But investors should be wary of any comparison between the two companies as they have drastically different business models. Simply, Roku is no Netflix.

Late Monday, Roku updated its financial guidance for the quarter ended in March, projecting a slightly higher sales range of $307 million to $317 million, versus its prior forecast of about $305 million. The company said it saw increased viewing numbers late in the quarter due to more people sheltering at home. It also withdrew its full-year 2020 financial outlook,  citing the economic uncertainties stemming from the Covid-19 pandemic. Its shares surged more than 10% in midday trading Tuesday.