Roku (NASDAQ:ROKU) Shares Climb 1.5% - Time to Buy?

Key Points

• Roku shares rose 1.5% to $162.77, with trading volume about 13% below its daily average.
• Roku’s latest quarter beat expectations: revenue increased 24.1% year over year to $1.50 billion, while EPS of $1.20 topped the $0.55 consensus; advertising revenue grew 23%.
• Analyst views remain mixed: MarketBeat’s consensus rating is “Hold” with a $156.17 price target, while Rosenblatt downgraded the stock to Hold and Needham reaffirmed Buy.

Roku, Inc. (NASDAQ:ROKU - Get Free Report)'s share price rose 1.5% during trading on Wednesday. The stock traded as high as $163.08 and last traded at $162.77. Approximately 2,853,024 shares were traded during mid-day trading, a decline of 13% from the average daily volume of 3,274,474 shares. The stock had previously closed at $160.36.

Key Roku News

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Roku’s third-quarter results comfortably beat expectations: revenue rose 24.1% year over year to $1.50 billion, and EPS was $1.20 versus the $0.55 consensus. Advertising revenue grew 23%, helping net income reach $183 million. The earnings beat is a key positive for investors. Roku earnings report
• Positive Sentiment: A technical analysis report says ROKU moved above its 20-day moving average after finding support, a signal that may indicate improving short-term momentum. Technical analysis
• Neutral Sentiment: A Roku director and the company’s chief accounting officer sold shares, but both transactions were made under pre-arranged Rule 10b5-1 plans, making them a limited indicator of management sentiment. Director sale filing
• Negative Sentiment: Rosenblatt Securities cut its rating from “buy” to “hold” and set a $160 price target, signaling limited upside in its view. Rosenblatt rating information
• Negative Sentiment: Roku plans to retire its popular Aquatic Life screensaver, drawing complaints from some users. The change appears more relevant to customer sentiment than to near-term financial performance. Screensaver coverage

Analyst Upgrades and Downgrades

A number of research firms have recently weighed in on ROKU. UBS Group increased their price target on Roku from $126.00 to $172.00 and gave the stock a "neutral" rating in a report on Friday, August 7th. Needham & Company LLC reaffirmed a "buy" rating on shares of Roku in a research report on Tuesday. Fox Advisors set a $157.00 target price on shares of Roku in a research report on Friday, July 17th. Seaport Research Partners lowered shares of Roku from a "buy" rating to a "neutral" rating in a research note on Friday, August 7th. Finally, Citigroup lifted their price target on shares of Roku from $120.00 to $157.00 and gave the company a "neutral" rating in a research report on Friday, July 17th. One equities research analyst has rated the stock with a Strong Buy rating, eight have given a Buy rating and eighteen have issued a Hold rating to the stock. According to MarketBeat, Roku has an average rating of "Hold" and a consensus price target of $156.17.

Roku Stock Up 1.5%

The firm has a 50-day moving average price of $155.15 and a 200 day moving average price of $128.06. The firm has a market capitalization of $24.16 billion, a PE ratio of 48.16 and a beta of 2.12.

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

Insider Buying and Selling

In other news, insider Gilbert Fuchsberg sold 10,719 shares of the firm's stock in a transaction that occurred on Thursday, August 6th. The shares were sold at an average price of $150.00, for a total value of $1,607,850.00. Following the completion of the transaction, the insider owned 40,380 shares of the company's stock, valued at approximately $6,057,000. This trade represents a 20.98% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, SVP Christopher T. Handman sold 2,999 shares of Roku stock in a transaction that occurred on Wednesday, September 2nd. The shares were sold at an average price of $155.64, for a total transaction of $466,764.36. Following the completion of the transaction, the senior vice president owned 8,997 shares of the company's stock, valued at $1,400,293.08. This trade represents a 25.00% decrease in their position. The disclosure for this sale is available in the SEC filing. 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. Insiders sold a total of 98,747 shares of company stock worth $15,253,772 over the last 90 days. 13.45% of the stock is owned by insiders.

Institutional Investors Weigh In On Roku

A number of hedge funds have recently added to or reduced their stakes in ROKU. AlphaCore Capital LLC boosted its holdings in Roku by 38.4% in the third quarter. AlphaCore Capital LLC now owns 2,114 shares of the company's stock valued at $322,000 after purchasing an additional 586 shares in the last quarter. Ashton Thomas Private Wealth LLC increased its stake in Roku by 18.5% in the third quarter. Ashton Thomas Private Wealth LLC now owns 2,579 shares of the company's stock valued at $393,000 after purchasing an additional 402 shares during the last quarter. Heritage Family Offices LLP acquired a new stake in Roku during the third quarter worth approximately $93,000. Calamos Advisors LLC raised its holdings in Roku by 15.9% during the third quarter. Calamos Advisors LLC now owns 376,627 shares of the company's stock worth $57,353,000 after purchasing an additional 51,627 shares in the last quarter. Finally, Kestra Advisory Services LLC raised its holdings in Roku by 54.1% during the third quarter. Kestra Advisory Services LLC now owns 10,753 shares of the company's stock worth $1,637,000 after purchasing an additional 3,775 shares in the last quarter. 86.30% of the stock is currently owned by institutional investors and hedge funds.

Roku Company Profile

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.

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