Roku Inc (NASDAQ:ROKU) stock fell 2.47% (As on January 12, 12:10:09 AM UTC-4, Source: Google Finance) after Jefferies downgraded the video streaming device maker to ‘underperform’ from ‘hold’, saying its growth potential is likely to be tempered by a tough macro environment. According to The Motley Fools, the ad scatter market has been abysmal, and that led to some poor growth numbers for the business of late.

To help address the issue, the company recently announced a big move that could change its business and make it less dependent on ad revenue. How should investors react to this latest effort?

Roku’s business centers around its popular streaming sticks that people can use to convert a regular TV into a smart TV that can use apps and easily access multiple streaming platforms, like Netflix or Disney +. Roku even has its own channel that offers free content.

Of late, the company has said it wants more control over the biggest screen in your house.

After years of licensing its operating system and offering reference designs to manufacturers, Roku’s coming out with its own television sets. The streaming company recently unveiled a new line of TVs that will be available later this year.

There are several reasons for Roku’s departure in strategy from purely partnering with manufacturers to becoming a competitor in its own right. Here are three investors should know. The company could undercut the competition on price, could sell TVs (that) “will enable further innovation around the TV experience.”, and could provide investors with a revenue boost.

Meanwhile, the company has added 2.3 million incremental Active Accounts, and The Roku Channel’s Streaming Hours increased more than 90% year over year. Platform revenue grew 15% year over year, which was lower than our historical growth rates but positive given the difficult macro environment. Total net revenue grew 12% YoY (year over year) to $761 million. Gross profit was down 2% YoY to $357 million. In Q3 the company reached 65.4 million Active Accounts globally. Active Account net adds were 2.3 million on a sequential basis, which was above both 2019 and 2021 levels. This growth was driven primarily by TV sales in both U.S. and international markets, along with improved Active Account retention. Player gross margin was down 4 percentage points year over year as supply chain costs remain elevated above pre-COVID levels.