Roku, Inc. (NASDAQ:ROKU) Receives Average Recommendation of "Hold" from Analysts

Key Points

• Analysts collectively rate Roku “Hold.” Nineteen of 27 analysts recommend holding the stock, while seven recommend buying and one gives a strong-buy rating; the average 12-month price target is $156.17.
• Roku reported stronger-than-expected quarterly results, with EPS of $1.08 versus a $0.61 consensus estimate and revenue of $1.35 billion, up 21.9% year over year.
• The stock trades near its 52-week high at a demanding 66.93 price-to-earnings ratio, while insiders have sold roughly $15.8 million of shares over the past three months, adding to valuation concerns.

Roku, Inc. (NASDAQ:ROKU - Get Free Report) has received a consensus recommendation of "Hold" from the twenty-seven brokerages that are currently covering the company, MarketBeat.com reports. Nineteen equities research analysts have rated the stock with a hold recommendation, seven have assigned a buy recommendation and one has issued a strong buy recommendation on the company. The average 1 year target price among brokerages that have issued ratings on the stock in the last year is $156.1667.

Several equities research analysts recently issued reports on the company. KeyCorp cut Roku from an "overweight" rating to a "sector weight" rating in a research note on Monday, June 15th. JPMorgan Chase & Co. initiated coverage on Roku in a report on Monday, August 24th. They issued a "neutral" rating and a $160.00 price objective for the company. Oppenheimer downgraded Roku from an "outperform" rating to a "market perform" rating in a research report on Monday, June 15th. Fox Advisors set a $157.00 target price on Roku in a report on Friday, July 17th. Finally, Jefferies Financial Group cut Roku from a "buy" rating to a "hold" rating and set a $160.00 price target on the stock. in a research report on Monday, June 15th.

Roku News Roundup

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Roku is expanding its original-content pipeline with Cowboy Hearts, a romantic comedy starring Kristin Cavallari. Additional programming could support engagement, advertising inventory and the Roku streaming-platform ecosystem. Kristin Cavallari to Star in Cowboy Hearts Romantic Comedy at Roku
• Positive Sentiment: Recent investor attention follows Roku’s strong latest quarterly report: revenue increased 21.9% year over year to $1.35 billion, while earnings exceeded analyst expectations. The company’s shares also recently advanced while the broader market declined, indicating continued investor interest in its growth story. Roku Ascends While Market Falls
• Neutral Sentiment: Coverage of Roku’s 4K streaming stick and outdoor projector emphasizes consumer value and product visibility, but discounts and pricing changes are not material financial catalysts by themselves. Roku 4K Streaming Stick Value Review
• Neutral Sentiment: Analyst coverage is focused on Roku alongside Netflix, Fox and SiriusXM, while elevated search interest may increase short-term trading activity without changing fundamentals. Zacks Industry Outlook
• Negative Sentiment: At roughly 67 times earnings and near its 12-month high, Roku has a demanding valuation. Without a new earnings forecast, major partnership or advertising-growth update, investors may lock in gains after the recent rally.

Roku Stock Performance

ROKU stock opened at $156.62 on Wednesday. The company's 50-day simple moving average is $150.64 and its 200 day simple moving average is $128.22. Roku has a 52 week low of $78.53 and a 52 week high of $159.89. The company has a market capitalization of $23.25 billion, a PE ratio of 66.93 and a beta of 2.05.

Roku (NASDAQ:ROKU - Get Free Report) last issued its quarterly earnings data on Thursday, August 6th. The company reported $1.08 earnings per share for the quarter, topping the consensus estimate of $0.61 by $0.47. Roku had a net margin of 6.82% and a return on equity of 13.73%. The business had revenue of $1.35 billion during the quarter, compared to analysts' expectations of $1.30 billion. During the same quarter in the previous year, the company earned $0.07 EPS. The business's revenue was up 21.9% on a year-over-year basis. On average, analysts forecast that Roku will post 2.85 EPS for the current year.

Insider Buying and Selling at Roku

In other news, SVP Christopher T. Handman sold 2,999 shares of the business's stock in a transaction that occurred on Wednesday, September 2nd. The shares were sold at an average price of $155.64, for a total value of $466,764.36. Following the completion of the transaction, the senior vice president directly owned 8,997 shares in the company, valued at approximately $1,400,293.08. The trade was a 25.00% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. 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. Also, insider Charles Collier sold 20,538 shares of the company's stock in a transaction that occurred on Friday, September 4th. The stock was sold at an average price of $156.99, for a total transaction of $3,224,260.62. Following the sale, the insider directly owned 22,700 shares of the company's stock, valued at approximately $3,563,673. This trade represents a 47.50% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 105,285 shares of company stock valued at $15,841,744 over the last three months. 13.45% of the stock is owned by insiders.

Institutional Inflows and Outflows

Institutional investors have recently added to or reduced their stakes in the company. Geode Capital Management LLC boosted its holdings in shares of Roku by 7.3% in the 4th quarter. Geode Capital Management LLC now owns 2,464,130 shares of the company's stock valued at $267,389,000 after purchasing an additional 168,214 shares in the last quarter. Arrowstreet Capital Limited Partnership raised its holdings in shares of Roku by 229.5% during the 1st quarter. Arrowstreet Capital Limited Partnership now owns 2,038,347 shares of the company's stock worth $192,868,000 after buying an additional 1,419,772 shares in the last quarter. Renaissance Technologies LLC lifted its position in shares of Roku by 22.8% during the 1st quarter. Renaissance Technologies LLC now owns 1,565,100 shares of the company's stock worth $148,090,000 after buying an additional 290,200 shares during the last quarter. Fred Alger Management LLC lifted its position in shares of Roku by 7,087.7% during the 4th quarter. Fred Alger Management LLC now owns 1,421,440 shares of the company's stock worth $154,212,000 after buying an additional 1,401,664 shares during the last quarter. Finally, Assenagon Asset Management S.A. boosted its stake in Roku by 24.7% in the first quarter. Assenagon Asset Management S.A. now owns 1,162,051 shares of the company's stock valued at $109,953,000 after buying an additional 230,398 shares in the last quarter. 86.30% of the stock is currently owned by institutional investors and hedge funds.

About Roku

Roku, Inc NASDAQ: ROKU operates a television streaming platform that connects consumers with digital entertainment. Its Roku operating system powers streaming players, Roku-branded televisions and smart-TV products made by licensing partners. The platform provides access to streaming services, live television, movies, music and other applications.

The company also operates The Roku Channel, its own ad-supported streaming service offering licensed and original content, including movies, television programs, live channels and premium subscription options.

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