Roku (NASDAQ:ROKU) Stock Falls 1.5% - Here's Why

Key Points

• Roku shares fell 1.5% to $160.37 on Thursday, while trading volume was 56% above its average.
• The latest quarter was stronger than expected: revenue rose 24.1% year over year to $1.50 billion, and EPS of $1.20 beat the $0.55 consensus.
• Analyst sentiment remains cautious overall: the consensus rating is Hold, with an average price target of $156.17, below the recent share price.

Roku, Inc. (NASDAQ:ROKU - Get Free Report)'s stock price fell 1.5% on Thursday. The stock traded as low as $160.12 and last traded at $160.37. 5,107,305 shares traded hands during trading, an increase of 56% from the average daily volume of 3,282,624 shares. The stock had previously closed at $162.77.

Key Stories Impacting Roku

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Roku recently reached a new 52-week high. A Zacks report also identifies ROKU as a long-term momentum stock, reinforcing the positive trend narrative. Zacks momentum report
• Positive Sentiment: Technical coverage points to a “golden cross” signal after shares moved above the 20-day moving average, which may encourage short-term bullish trading. Zacks technical analysis
• Positive Sentiment: Recent results provide fundamental support for the rally: Roku reported quarterly revenue of $1.50 billion, up 24.1% year over year and above estimates, while EPS of $1.20 topped the $0.55 consensus. Roku earnings and advertising coverage
• Neutral Sentiment: Director Neil Hunt and Chief Accounting Officer Matthew Banks sold shares under pre-arranged Rule 10b5-1 plans. The scheduled nature of the sales makes them a limited signal of insiders’ current views. Director sale filing
• Negative Sentiment: The reported analyst consensus price target is $156.17, below the recent share price near $160, suggesting analysts see limited upside at current levels; the consensus rating is Hold. Analyst price target report
• Negative Sentiment: Roku’s decision to retire its popular Aquatic Life screensaver has prompted consumer complaints. This appears to be a modest product/reputation concern rather than a major near-term financial driver. Screensaver coverage

Analyst Upgrades and Downgrades

A number of equities research analysts recently issued reports on the company. Rosenblatt Securities lowered Roku from a "buy" rating to a "hold" rating and set a $160.00 target price on the stock. in a research note on Tuesday. Needham & Company LLC reiterated a "buy" rating on shares of Roku in a report on Tuesday. Wedbush restated a "neutral" rating and set a $155.00 price target on shares of Roku in a research note on Thursday, September 24th. Citigroup lifted their target price on shares of Roku from $120.00 to $157.00 and gave the company a "neutral" rating in a report on Friday, July 17th. Finally, BMO Capital Markets raised shares of Roku from a "market perform" rating to an "outperform" rating in a research report on Tuesday. One 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 company's stock. According to MarketBeat.com, the company has a consensus rating of "Hold" and an average price target of $156.17.

Roku Stock Performance

The company has a market capitalization of $23.80 billion, a PE ratio of 47.45 and a beta of 2.12. The company has a 50 day moving average price of $155.21 and a 200 day moving average price of $128.34.

Roku (NASDAQ:ROKU - Get Free Report) last issued its quarterly earnings results on Monday, November 2nd. The company reported $1.20 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.55 by $0.65. The business had revenue of $1.50 billion during the quarter, compared to analyst estimates of $1.41 billion. Roku had a net margin of 9.34% and a return on equity of 18.65%. The business's revenue was up 24.1% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $0.16 earnings per share. On average, equities analysts forecast that Roku, Inc. will post 2.97 earnings per share for the current fiscal year.

Insider Buying and Selling at Roku

In related news, Director Neil Hunt sold 2,000 shares of the firm's stock in a transaction on Monday, November 2nd. The stock was sold at an average price of $156.17, for a total transaction of $312,340.00. Following the transaction, the director directly owned 9,629 shares in the company, valued at $1,503,760.93. This trade represents a 17.20% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Gilbert Fuchsberg sold 4,824 shares of Roku stock in a transaction on Wednesday, September 2nd. The stock was sold at an average price of $155.64, for a total transaction of $750,807.36. Following the completion of the transaction, the insider directly owned 40,168 shares of the company's stock, valued at approximately $6,251,747.52. This represents a 10.72% 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. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last 90 days, insiders sold 88,028 shares of company stock worth $13,645,922. 13.45% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently modified their holdings of the business. Arrowstreet Capital Limited Partnership lifted its position in shares of Roku by 229.5% in the first 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 during the last quarter. Renaissance Technologies LLC grew 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 acquiring an additional 290,200 shares during the last quarter. HBK Investments L P acquired a new position in Roku during the 2nd quarter valued at $163,604,000. Bank of America Corp DE raised its stake in Roku by 5.5% during the 1st quarter. Bank of America Corp DE now owns 1,082,755 shares of the company's stock valued at $102,450,000 after purchasing an additional 56,893 shares during the last quarter. Finally, Janus Henderson Group PLC raised its stake in Roku by 1,320.4% during the 1st quarter. Janus Henderson Group PLC now owns 834,619 shares of the company's stock valued at $78,967,000 after purchasing an additional 775,861 shares during the last quarter. 86.30% of the stock is 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.

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.