Comparing Roku (NASDAQ:ROKU) and Gray Media (NYSE:GTN)

Roku (NASDAQ:ROKU) and Gray Media (NYSE:GTN) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Risk and Volatility

Roku has a beta of 2, meaning that its share price is 100% more volatile than the S&P 500. Comparatively, Gray Media has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Profitability

This table compares Roku and Gray Media’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Roku	1.87%	3.40%	2.04%
Gray Media	-2.75%	-2.51%	-0.53%

Earnings and Valuation

This table compares Roku and Gray Media”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Roku	$4.74 billion	3.14	$88.36 million	$0.57	177.18
Gray Media	$3.10 billion	0.16	-$85.00 million	($1.42)	-3.45

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Roku and Gray Media, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Roku	0	4	21	1	2.88
Gray Media	1	2	3	0	2.33

Roku currently has a consensus target price of $127.58, suggesting a potential upside of 26.33%. Gray Media has a consensus target price of $8.13, suggesting a potential upside of 65.99%. Given Gray Media’s higher probable upside, analysts plainly believe Gray Media is more favorable than Roku.

Institutional & Insider Ownership

86.3% of Roku shares are held by institutional investors. Comparatively, 78.6% of Gray Media shares are held by institutional investors. 14.0% of Roku shares are held by insiders. Comparatively, 15.2% of Gray Media shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Roku beats Gray Media on 13 of the 15 factors compared between the two stocks.

About Roku

Roku, Inc., together with its subsidiaries, operates a TV streaming platform in the United states and internationally. The company operates in two segments, Platform and Devices. Its streaming platform allows users to find and access TV shows, movies, news, sports, and others. The Platform segment offers digital advertising, including direct and programmatic video advertising, media and entertainment promotional spending, and related services; and streaming services distribution, such as subscription and transaction revenue shares, and sale of premium subscriptions and branded app buttons on remote controls. The Devices segment provides sale of streaming players, Roku-branded TVs, smart home products and services, audio products, and related accessories as well as licensing arrangements with service operators. Roku, Inc. was incorporated in 2002 and is headquartered in San Jose, California.

About Gray Media

Gray Television, Inc., a television broadcasting company, owns and/or operates television stations and digital assets in the United States. It also broadcasts secondary digital channels affiliated to ABC, CBS, NBC, and FOX, as well as various other networks and program services, including CW Plus Network, MY Network, the MeTV Network, Circle, Telemundo, THE365, and Outlaw; and local news/weather channels in various markets. It owns and operates television stations and digital assets that serve television markets in the United States. The company was formerly known as Gray Communications Systems, Inc. and changed its name to Gray Television, Inc. in August 2002. Gray Television, Inc. was founded in 1891 and is headquartered in Atlanta, Georgia.