Wood announces all daily Ark transactions. Added to existing positions in Roku (ROKU 5,22%), Velo3D (VLD 3.96%) and Teladoc Health (TDOC 3.93%) on Monday. Let's take a closer look.
1. Roku
We're spending more time streaming TV than ever before, but you wouldn't know it by looking at Roku's stock chart. The video streaming pioneer's shares are trading 89% below their peak two summers ago.
Image source: Getty Images.
Roku itself is still growing. It recently announced that it ended 2022 with over 70 million active accounts, at least 16% more than it was at the beginning of the year. People with a smart TV that comes with Roku OS built-in or who purchase a dongle to connect to the device spend a lot of time on the platform. The 23.9 billion hours streamed collectively by Roku in the last three months represents a 19% increase compared to the fourth quarter of 2021.
Why isn't the headline better? It's a fair question, and we can start with the bottom line. Roku was profitable in the second half of 2020 and through 2021. It ran record deficits through 2022. Subsidizing its hardware in a highly competitive market and investing in original content decimated Roku's profitability. Initially, supply chain constraints were the downturn in the bottom line, but now it's clearly more than that.
Roku's latest guidance is also problematic. While growth and engagement are holding up well, the bleak short-term outlook implies that ad revenue per user will take a major hit when Roku reports new financials in February.
2. Velo3D
Revenue gains have slowed for one of the fastest-growing 3D printing stocks, but it's hard to complain after Velo3D's 119% year-over-year increase in its most recent quarter. Velo3D is the smallest stock of the three on this list, but it does some pretty big things. It provides additive manufacturing solutions for the aerospace, aircraft, industrial energy, and oil and gas industries.
Velo3D's flagship product is its Sapphire line of metal printers. It helps companies create industrial metal parts in-house, cheaper and faster than if they had to source them from third-party suppliers. Whether a single part supports an assembly line or an operational function, rest assured that timing is everything. The printers aren't cheap, but they also don't mean a prolonged work stoppage.
We're still in the early stages of Velo3D's growth cycle. Revenue more than doubled last quarter, but was only $19.1 million. It also fell short of Wall Street expectations and prompted Velo3D to lower its full-year guidance. It had been targeting $19.9 million in revenue for the full year 2022 for most of the year, before lowering it to $19.9 million and $19.9 million around the time of its disappointing third-quarter performance in November.
The company also announced plans to raise funds through a mixed stock offering, a bad move just days after the stock plummeted on its weaker outlook. It plays a vital role in 3D printing metal parts, with an impressive client base. It can't afford to fail again when it reports fourth-quarter financials in a few weeks.
3. Teladoc Health
Wood prescribed herself a fairly steady dose of Teladoc Health. She has now increased her position in the telehealth specialist in three of the last six trading sessions. Like Roku, the stock has fallen sharply since hitting all-time highs in 2021. Teladoc's 91% drop from its peak is worse than Roku's, but both stocks have been recovering recently, with double-digit percentage gains in January.
Teladoc continues to see growth in its virtual doctor visit business. Revenue increased 20% in the first three quarters of 2022, including a 17% increase in the most recent report. Top-line gains will continue, but, like Roku, losses are becoming too much for investors to bear. It announced layoffs earlier this month. With competition heating up for telehealth stocks, it may need to make some further cost-structure cuts to return as a health market darling.
Rick Munarriz holds positions in Roku. The Motley Fool has locations and recommends Roku and Teladoc Health. The Motley Fool recommends Velo3D. The Motley Fool has a disclosure policy.
