After Roku Inc.’s massive 2019 rally, which took the stock up a mind-boggling 450%, the streaming media company took a hit on Wednesday after a media giant, Comcast, made a move that undercuts the makers of streaming-media players.

Comcast Corp. CMCSA, announced Wednesday that it would be offering its Xfinity Flex box for free to those who subscribe to the cable operator’s internet-only plans. With the Flex, customers can to watch streaming services on their television sets with a “curated” interface that highlights live and new programming.

Shares of Roku ROKU,are getting battered today, off 11% in Wednesday trading, while Comcast’s shares are up 0.2%.

Roku has been a pioneer in streaming video gadgets. The company started as a hardware manufacturer, in its pioneering days, building boxes to enable viewers watch streaming content on their TVs. Now ROKU stock is driven by two revenue segments: Player, which represents sales of its digital media boxes; and, Platform, which includes advertising sales, licensing and other non-hardware revenue sources.

While the move in Roku is unsettling for investors interested in the stock, experts suggest that it could still be a good buy at some point, but that the up-move has been hyperbolic and needs time to settle down.

“This volatility today is not not the first day of this kind of volatility. Look, it’s clearly been a momentum stock. It’s overcome fundamentals and valuation. Momentum in the fundamentals has been very very strong, so it’s rewarded. But I don’t believe this is the kind of market you go into for overvalued equities and momentum trades. So when you come back down to earth, I don’t think it’s down to earth yet, and then you get involved,” said Steven Weiss on CNBC.
Others see looking into alternative stocks as a way to play the streaming market.
“I would say those streaming overall from a fundamental thesis in investing, it’s a good one. There’s a name I think I mentioned it last week, Akamai. I don’t think we talk about it enough. AKAM: $15 billion company. It’s been name to several of the stock indexes recently that focus on E.S.G., and it’s a way to play this wave into streaming. And I think it’s a little less volatile then what you’ve been experiencing at Roku,” said Joe Terranova from CNBC.

Disney’s new streaming service, Disney+, will launch on Nov. 12, and will include original movies and TV shows from the Magic Kingdom’s brands. The entertainment monster has recently announced that Disney+ will be streamed on the PS4 and Roku, which will potentially offer Roku stock price a boost as well.

Investors looking into streaming services can explore industrials, consumer discretionary, and technology-based ETFs that contain ROKU, including SPDR FactSet Innovative Technology ETF (XITK)Invesco DWA Industrials Momentum ETF (PRN)First Trust Consumer Discretionary AlphaDEX Fund (FXD)and iShares Morningstar Small-Cap Growth ETF (JKK).

For more market news and updates, visit ETFtrends.com.

Subscribe to our free daily newsletters!
Please enter your email address to subscribe to ETF Trends' newsletters featuring latest news and educational events.