Roku, Inc. $ROKU Stock: VIRGINIA RETIREMENT SYSTEMS ET Al Cuts Position

Key Points

• Virginia Retirement Systems reduced its Roku stake by 44.2% in the third quarter, selling 14,310 shares and retaining 18,080 shares valued at approximately $2.75 million. Institutional investors still own 86.3% of Roku’s outstanding stock.
• Roku reported a strong third quarter, with adjusted EPS of about $1.20 versus the $0.55 consensus and revenue of $1.50 billion, up 24.1% year over year. Advertising growth and improved margins helped drive a roughly sevenfold increase in net income.
• Investor sentiment remains mixed: analysts give Roku a consensus “Hold” rating with a $156.17 target, while Fox’s approximately $22 billion acquisition has advanced after receiving required foreign regulatory approvals. Roku is providing limited forward guidance because of the pending transaction.

VIRGINIA RETIREMENT SYSTEMS ET Al reduced its stake in Roku, Inc. (NASDAQ:ROKU - Free Report) by 44.2% during the third quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The fund owned 18,080 shares of the company's stock after selling 14,310 shares during the period. VIRGINIA RETIREMENT SYSTEMS ET Al's holdings in Roku were worth $2,753,000 as of its most recent SEC filing.

Other institutional investors and hedge funds have also recently modified their holdings of the company. Arrowstreet Capital Limited Partnership lifted its position in Roku by 229.5% in the 1st quarter. Arrowstreet Capital Limited Partnership now owns 2,038,347 shares of the company's stock valued at $192,868,000 after acquiring an additional 1,419,772 shares in the last quarter. HBK Investments L P bought a new stake in shares of Roku in the 2nd quarter worth $163,604,000. Renaissance Technologies LLC raised its stake in shares of Roku by 22.8% in the first quarter. Renaissance Technologies LLC now owns 1,565,100 shares of the company's stock worth $148,090,000 after purchasing an additional 290,200 shares during the last quarter. Bank of New York Mellon Corp purchased a new position in shares of Roku in the second quarter worth $105,216,000. Finally, Bank of America Corp DE raised its stake in shares of Roku by 5.5% in the first quarter. Bank of America Corp DE now owns 1,082,755 shares of the company's stock worth $102,450,000 after purchasing an additional 56,893 shares during the last quarter. 86.30% of the stock is currently owned by institutional investors.

Roku News Summary

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Large Q3 earnings and revenue beats: Roku reported approximately $1.20 in adjusted EPS, more than double the $0.55 analyst consensus, while revenue reached $1.50 billion versus expectations of $1.41 billion. Revenue increased 24.1% year over year, and earnings rose sharply from $0.16 a year earlier. Roku quarterly earnings report
• Positive Sentiment: Advertising performance supported profitability: Advertising revenue grew 23%, with improved gross margins allowing Roku to retain more profit from each advertising dollar. Lower marketing expenses also contributed to a roughly sevenfold increase in net income, reported at about $183 million. Roku advertising and profit growth article
• Positive Sentiment: Fox acquisition is progressing: Fox has reportedly received all required foreign regulatory approvals for its approximately $22 billion acquisition of Roku, narrowing the deal spread and reducing a key execution risk. Roku Fox acquisition regulatory approval article
• Neutral Sentiment: Limited forward guidance: Because of the pending Fox transaction, Roku will not host an earnings call or provide financial outlook. This makes near-term valuation and expectations more dependent on reported results and merger developments. Roku third-quarter financial results
• Negative Sentiment: Higher costs are expected: Roku indicated that marketing expenses should increase in the fourth quarter, potentially limiting the pace of margin expansion after the strong Q3 performance. The company is also removing a popular feature, which could create some customer dissatisfaction, although the financial effect appears limited. Roku feature removal article

Analyst Upgrades and Downgrades

A number of equities analysts have weighed in on the company. Wedbush reissued a "neutral" rating and issued a $155.00 target price on shares of Roku in a research report on Thursday, September 24th. Wells Fargo & Company lowered shares of Roku from an "overweight" rating to an "equal weight" rating and reduced their price target for the stock from $167.00 to $165.00 in a research note on Friday, August 14th. Needham & Company LLC restated a "buy" rating on shares of Roku in a research report on Friday, August 7th. Guggenheim cut shares of Roku from a "buy" rating to a "neutral" rating and raised their target price for the stock from $145.00 to $160.00 in a report on Friday, August 7th. Finally, UBS Group raised their target price on shares of Roku from $126.00 to $172.00 and gave the stock a "neutral" rating in a report on Friday, August 7th. One investment analyst has rated the stock with a Strong Buy rating, seven have issued a Buy rating and eighteen have issued a Hold rating to the company's stock. According to data from MarketBeat, the stock has an average rating of "Hold" and a consensus price target of $156.17.

Insider Buying and Selling at Roku

In related news, CFO Dan Jedda sold 7,000 shares of the business's stock in a transaction on Thursday, October 15th. The shares were sold at an average price of $152.84, for a total value of $1,069,880.00. Following the completion of the transaction, the chief financial officer directly owned 67,811 shares in the company, valued at $10,364,233.24. The trade was a 9.36% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Neil D. Hunt sold 2,000 shares of the business's stock in a transaction on Thursday, October 1st. The shares were sold at an average price of $151.09, for a total transaction of $302,180.00. Following the completion of the transaction, the director owned 9,629 shares of the company's stock, valued at approximately $1,454,845.61. This represents a 17.20% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders have sold 96,195 shares of company stock worth $14,854,525. 13.45% of the stock is currently owned by insiders.

Roku Trading Up 0.3%

NASDAQ ROKU opened at $155.52 on Tuesday. The company's 50-day moving average price is $155.11 and its 200-day moving average price is $127.79. The stock has a market cap of $23.08 billion, a PE ratio of 63.66 and a beta of 2.05. Roku, Inc. has a 12 month low of $78.53 and a 12 month high of $160.22.

Roku (NASDAQ:ROKU - Get Free Report) last announced its quarterly earnings results on Monday, November 2nd. The company reported $1.20 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.55 by $0.65. Roku had a return on equity of 13.73% and a net margin of 6.82%. The firm had revenue of $1.50 billion during the quarter, compared to analyst estimates of $1.41 billion. During the same quarter in the previous year, the business earned $0.16 earnings per share. Roku's quarterly revenue was up 24.1% on a year-over-year basis. As a group, sell-side analysts forecast that Roku, Inc. will post 2.97 earnings per share for the current year.

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.