Roku (NASDAQ:ROKU) Rating Lowered to "Hold" at Rosenblatt Securities

Key Points

• Rosenblatt Securities downgraded Roku from “buy” to “hold,” setting a $160 price target—about 0.2% below the prior close. Analysts overall also rate the stock “hold,” with a consensus target of $156.17.
• Roku reported a strong quarter: revenue rose 24.1% year over year to $1.50 billion, topping estimates, while EPS of $1.20 more than doubled the $0.55 consensus.
• Higher costs expected in Q4 could put pressure on profits and temper the momentum from the earnings beat.

Roku (NASDAQ:ROKU - Get Free Report) was downgraded by Rosenblatt Securities from a "buy" rating to a "hold" rating in a research note issued to investors on Tuesday, Marketbeat.com reports. They currently have a $160.00 price target on the stock. Rosenblatt Securities's price target would suggest a potential downside of 0.22% from the company's previous close.

Several other research analysts have also recently weighed in on ROKU. Wells Fargo & Company cut shares of Roku from an "overweight" rating to an "equal weight" rating and lowered their price target for the company from $167.00 to $165.00 in a research report on Friday, August 14th. UBS Group boosted their price objective on Roku from $126.00 to $172.00 and gave the stock a "neutral" rating in a research report on Friday, August 7th. Citigroup boosted their price objective on Roku from $120.00 to $157.00 and gave the stock a "neutral" rating in a research report on Friday, July 17th. JPMorgan Chase & Co. assumed coverage on Roku in a report on Monday, August 24th. They issued a "neutral" rating and a $160.00 price target for the company. Finally, BMO Capital Markets raised Roku from a "market perform" rating to an "outperform" rating in a report on Tuesday. One investment analyst has rated the stock with a Strong Buy rating, eight have assigned a Buy rating and eighteen have given a Hold rating to the stock. According to data from MarketBeat.com, Roku currently has an average rating of "Hold" and a consensus price target of $156.17.

Roku Stock Up 3.1%

Shares of ROKU opened at $160.36 on Tuesday. Roku has a 52-week low of $78.53 and a 52-week high of $161.26. The firm's fifty day moving average is $155.15 and its two-hundred day moving average is $128.06. The stock has a market cap of $23.80 billion, a PE ratio of 47.44 and a beta of 2.12.

Roku (NASDAQ:ROKU - Get Free Report) last announced its earnings results on Monday, November 2nd. The company reported $1.20 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.55 by $0.65. Roku had a net margin of 9.34% and a return on equity of 19.19%. The company had revenue of $1.50 billion for the quarter, compared to analysts' expectations of $1.41 billion. During the same quarter in the previous year, the company posted $0.16 EPS. The firm's quarterly revenue was up 24.1% on a year-over-year basis. As a group, research analysts anticipate that Roku will post 2.97 earnings per share for the current year.

Insider Buying and Selling at Roku

In other news, CAO Matthew Banks sold 552 shares of the company's stock in a transaction that occurred on Monday, November 2nd. The stock was sold at an average price of $157.44, for a total transaction of $86,906.88. Following the completion of the sale, the chief accounting officer owned 7,016 shares in the company, valued at $1,104,599.04. This represents a 7.29% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Gilbert Fuchsberg sold 4,824 shares of the company's stock in a transaction that occurred on Wednesday, September 2nd. The stock was sold at an average price of $155.64, for a total value of $750,807.36. Following the sale, the insider owned 40,168 shares of the company's stock, valued at $6,251,747.52. This trade represents a 10.72% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last three months, insiders have sold 98,747 shares of company stock valued at $15,253,772. Corporate insiders own 13.45% of the company's stock.

Institutional Investors Weigh In On Roku

Large investors have recently modified their holdings of the stock. 55 North Private Wealth LLC increased its position in Roku by 4.8% during the 3rd quarter. 55 North Private Wealth LLC now owns 1,592 shares of the company's stock worth $242,000 after purchasing an additional 73 shares in the last quarter. CX Institutional boosted its stake in Roku by 44.1% in the 3rd quarter. CX Institutional now owns 281 shares of the company's stock worth $43,000 after buying an additional 86 shares during the last quarter. Apella Capital LLC lifted its stake in shares of Roku by 1.4% in the 3rd quarter. Apella Capital LLC now owns 6,752 shares of the company's stock valued at $1,031,000 after purchasing an additional 93 shares in the last quarter. Quantum Portfolio Management LLC lifted its stake in shares of Roku by 2.6% in the 1st quarter. Quantum Portfolio Management LLC now owns 4,135 shares of the company's stock valued at $391,000 after purchasing an additional 105 shares in the last quarter. Finally, HB Wealth Management LLC lifted its stake in shares of Roku by 3.7% in the 1st quarter. HB Wealth Management LLC now owns 3,447 shares of the company's stock valued at $326,000 after purchasing an additional 122 shares in the last quarter. Hedge funds and other institutional investors own 86.30% of the company's stock.

Roku News Summary

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Roku reported Q3 revenue of $1.50 billion, up 24.1% year over year and ahead of the $1.41 billion consensus. EPS of $1.20 topped the $0.55 estimate, and net income reached $183 million. Advertising revenue grew 23%, helping drive the strong results. Roku Q3 earnings report
• Positive Sentiment: Fox received all foreign regulatory approvals for its proposed acquisition of Roku, reducing one source of deal uncertainty. The transaction remains pending further steps. Fox-Roku deal update
• Neutral Sentiment: Director Neil Hunt and Chief Accounting Officer Matthew Banks sold shares, but both transactions were made under pre-arranged Rule 10b5-1 trading plans, making them a limited signal of their current views on Roku. Director’s SEC filing CAO’s SEC filing
• Negative Sentiment: Rosenblatt Securities cut its rating from “buy” to “neutral” and set a $160 price target, indicating limited upside in its assessment. Rosenblatt downgrade
• Negative Sentiment: Roku expects higher costs in Q4, which could weigh on profit and partially offset the momentum from its earnings beat. Q4 cost outlook

About Roku

Roku, Inc NASDAQ: ROKU operates a television streaming platform that connects consumers with digital entertainment. The company develops and licenses Roku OS, an operating system for smart televisions and streaming devices, and offers Roku-branded streaming players, Roku TVs, audio products and related accessories.

Roku also operates a platform business that distributes streaming content through its interface and supports content discovery, subscriptions and digital advertising. Its services include The Roku Channel, which provides a selection of ad-supported and premium entertainment, as well as tools that enable content providers and advertisers to reach streaming audiences.

Founded in 2002 by Anthony Wood, Roku initially became known for its streaming players and later expanded through partnerships with television manufacturers.