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Roku, Inc. (ROKU) vs Warner Music Group Corp. (WMG)

Roku, Inc. and Warner Music Group Corp. are both Entertainment companies. Roku, Inc. is the larger, with a market value of $23.9B against $16.7B — 1.4× the size. Warner Music Group Corp. trades at the lower P/E: 24.4× against 46.4×. Roku, Inc. grew revenue faster over the last twelve months: 21.1% against 12.9%. Roku, Inc. has the higher net margin (9.34% vs 9.20%) and the higher return on invested capital (85.0% vs 12.4%). Across the 21 metrics below, Roku, Inc. leads on 11 and Warner Music Group Corp. on 10.

Valuation

Metric ROKU WMG Entertainment median
P/E 46.38 24.44 22.74
P/S 4.34 2.23 1.42
P/B 7.87 17.12 1.75
Price to free cash flow 29.79 19.52 16.20
EV/EBITDA 27.30 14.48 8.73
EV/Sales 3.88 2.81 1.64
Earnings yield 2.16% 4.09% (1.47%)
Free cash flow yield 3.36% 5.12% 4.06%

Profitability

Metric ROKU WMG Entertainment median
Gross margin 45.34% 45.77% 45.34%
Operating margin 7.78% 13.69% 2.37%
Net margin 9.34% 9.20% 0.00%
Free cash flow margin 14.57% 11.45% 3.16%
Return on equity 18.15% 76.15% 3.11%
Return on assets 11.02% 6.55% 0.00%
Return on invested capital 84.99% 12.39% 1.26%

Growth

Metric ROKU WMG Entertainment median
Revenue growth (TTM) 21.07% 12.91% 8.76%
EPS growth (last fiscal year) 166.29% (16.87%) 9.67%
Revenue growth, 5-year CAGR 21.65% 8.49% 10.07%
Net income growth, 5-year CAGR 0.00% 0.00% 0.00%

Health

Metric ROKU WMG Entertainment median
Debt to equity 0.00 4.94 0.46
Current ratio 2.70 0.73 1.00
Net debt to EBITDA (6.92) 3.58 0.97

Dividend

Metric ROKU WMG Entertainment median
Dividend yield — 2.46% 1.24%
Payout ratio — 0.61 0.26

Size

Metric ROKU WMG Entertainment median
Market cap 23.91b 16.70b 3.22b

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