MSG Networks (MSGN) versus Roku (ROKU) Head-To-Head Review

MSG Networks (NASDAQ: ROKU) and Roku (NASDAQ:ROKU) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for MSG Networks and Roku, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MSG Networks 1 3 4 0 2.38
Roku 0 6 6 0 2.50

MSG Networks presently has a consensus price target of $25.17, suggesting a potential upside of 3.57%. Roku has a consensus price target of $51.22, suggesting a potential downside of 13.90%. Given MSG Networks’ higher possible upside, equities research analysts plainly believe MSG Networks is more favorable than Roku.

Valuation and Earnings

This table compares MSG Networks and Roku’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MSG Networks $696.65 million 2.60 $288.86 million $3.81 6.38
Roku $512.76 million 12.31 -$63.50 million ($2.24) -26.56

MSG Networks has higher revenue and earnings than Roku. Roku is trading at a lower price-to-earnings ratio than MSG Networks, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

83.5% of MSG Networks shares are held by institutional investors. Comparatively, 33.7% of Roku shares are held by institutional investors. 18.1% of MSG Networks shares are held by company insiders. Comparatively, 0.6% of Roku shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares MSG Networks and Roku’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MSG Networks 41.46% -24.41% 21.66%
Roku -7.49% -60.24% -13.56%

Summary

MSG Networks beats Roku on 10 of the 13 factors compared between the two stocks.

MSG Networks Company Profile

MSG Networks Inc. engages in the sports production, and content development and distribution businesses in the United States. The company owns and operates MSG Network and MSG+, which are regional sports and entertainment networks. It also operates MSG GO that provides live streaming and video on demand, as well as a Website and social media platforms for its brands. The company was formerly known as The Madison Square Garden Company and changed its name to MSG Networks Inc. in October 2015. MSG Networks Inc. was founded in 1969 and is based in New York, New York.

Roku Company Profile

Roku, Inc. operates a TV streaming platform. The company operates in two segments, Player and Platform. Its platform allows users to search, discover, and access approximately 500,000 movies and TV episodes, as well as live sports, music, news, and others. As of December 31, 2017, the company had 19.3 million active accounts. It also provides advertising products, including videos ads, interactive video ads, audience development promotions, and brand sponsorships; and manufactures, sells, and licenses TVs under the Roku TV name. In addition, the company offers streaming media players and accessories under the Roku brand that allow users to access its TV streaming platform; and sells branded channel buttons on remote controls. It provides its products and services through retailers and distributors, as well as directly to customers through its Website in the United States, Canada, the United Kingdom, France, the Republic of Ireland, and various Latin American countries. The company was founded in 2002 and is headquartered in Los Gatos, California.

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