For Cathie Wood's investment style, this is a challenging period. The co-founder, CEO, and investor of Ark Invest found that Wood's aggressive growth-oriented exchange-traded fund family lost to the market for the third time in four years by 2024. Can she get back on track? She certainly won't stand still. #2024 Macro Outlook# #2024 Investment Strategy#
Ark Invest took multiple measures on Tuesday, June 25th, and Roku (NASDAQ: ROKU), Blade Air Mobility (NASDAQ: BLDE), and Pager Duty (NYSE: PD) suddenly appeared on its shopping list.
1. Roku
It's not just Roku's 81.6 million households crazy about watching Roku. Wood has been increasing her position for four consecutive trading days. Ark Invest now holds more than 9% of Roku's total outstanding shares.
Like many of the stocks that drove Wood's funds to achieve amazing returns from 2000 to 2023, Roku performed well last year.
The stock price of the streaming video platform more than doubled. However, the situation this year is not optimistic. Roku fell 40% in 2024 and lagged behind in the originally active market.
Roku is still growing. In the past year, the number of households watching TV streaming through the Roku operating system has increased by 14%. Even better, audience participation has increased significantly, as its latest quarter streaming time soared by 23%.
Several factors have hindered Roku's development. After a brief period of profitability, Roku has now experienced losses for nine consecutive quarters. The company has achieved positive free cash flow for three consecutive quarters, and it is in the tens of millions of dollars, but investors will cheer once Roku returns to actual profitability.
Another factor hindering Roku's development is that people are worried that Walmart's plan to acquire a small competitor of Roku will cause damage in this area. This is not an ideal situation, but it seems unlikely to change the rules of the game. The regulatory agency has not yet approved the deal, and even if it does overcome antitrust barriers, it does not mean that Roku is not ready. For years, it has competed with some of the most valuable consumer and consumer technology companies in the United States. It is no longer content with the status quo.
The average revenue per user has also been low, but Roku may be turning things around. In the past four quarters, Roku has only experienced one consecutive decline in this regard. As streaming playback time increases more than active users, it is only a matter of time before advertisers invest more money where audiences spend more time.
2. Blade Air Mobility
Compared with Roku's 40% plunge so far this year, Blade Air Mobility's 9% drop in 2024 is just a small fluctuation. Blade Air Mobility provides on-demand helicopter transport services, mainly transporting affluent passengers from airports to the city center of densely populated markets. If you can afford this convenience, you can reach the center of Manhattan from Kennedy Airport in just five minutes, which is obviously attractive. Blade Air Mobility also collaborates with hospitals and other medical partners.
The company's latest quarter revenue grew 14% to $51.5 million. Excluding the Blade One scheduled flight service between New York and South Florida, which was grounded last year, the company's revenue growth would reach 22%. The profit margin is increasing, but it will take several years to reach profitability.
In 2021 and 2022, the company's revenue doubled for two consecutive years, but the growth rate slowed compared to the rapid growth in 2021 and 2022. In this high-end short-haul aviation transportation field, there are several listed companies, but Blade Air Mobility stands out as an early participant. The company is investing in high-tech and carbon-neutral electric vertical aircraft to keep up with some young players, but short-haul flight market will be a long-term battle.
3. Pager Duty
Pager Duty has only fallen 5% this year, but Ark Invest has been buying the company's stock frequently recently. In June, Wood increased her position in this cloud-based enterprise analytics and normal operation time monitoring provider every trading day.
Pager Duty's slowing growth is worrying. In the past two years, the company's growth rate has been slowing down, and its revenue growth rate has dropped from 34% to 8% in the latest financial report.
Q2 2023: 34%
Q3 2023: 31%
Q4 2023: 29%
Q1 2024: 21%
Q2 2024: 19%
Q3 2024: 15%
Q4 2024: 10%
Q1 2025: 8%
This month, not only Wood showed favor for PagerDuty. Chad Bennett, an analyst at Craig-Hallum, started following the stock two weeks ago and upgraded the company's rating from Hold to Buy. He also raised the target price of the stock from $21 to $30, which means the stock has a potential upside of 37% compared to the current stock price. It is expected that PagerDuty's revenue growth will accelerate later this year and the company's profit grew by double digits over the past year, which may be the right decision.