Roku (NASDAQ:ROKU) Stock Price Up 1.4% - Should You Buy?

Key Points

• Roku shares rose 1.4% to about $160.06 on above-average trading volume, giving the company a market capitalization of approximately $23.76 billion.
• Roku reported strong quarterly results, with revenue up 21.9% year over year to $1.35 billion and EPS of $1.08, well above the $0.61 consensus estimate. Its advertising platform is also positioning for growth as connected-TV budgets increasingly emphasize targeting and measurement.
• Investor sentiment remains mixed: optimism around potential DOJ approval of a Roku–Fox deal supports the stock, while the analyst consensus is “Hold” with an average price target of $156.17; recent insider selling is an additional modest caution signal.

Shares of Roku, Inc. (NASDAQ:ROKU - Get Free Report) shot up 1.4% during trading on Thursday. The company traded as high as $160.10 and last traded at $160.06. Approximately 4,805,372 shares changed hands during trading, an increase of 47% from the average session volume of 3,277,903 shares. The stock had previously closed at $157.78.

Key Stories Impacting Roku

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Market confidence in the reported Roku–Fox deal increased after a report suggested the U.S. Department of Justice could soon approve the transaction. The narrowing deal spread indicates investors see a higher probability of completion, though regulatory approval has not yet been confirmed. Roku/Fox deal spread narrows on report DOJ could soon approve deal
• Positive Sentiment: Roku is emphasizing interoperability, data clean rooms, measurement and frequency controls as connected-TV advertising attracts more traditional television budgets. Better targeting and proof of performance could support Roku’s advertising platform and long-term revenue growth. Roku Bets on Interoperability as CTV Moves From Reach to Accountability
• Positive Sentiment: Roku’s latest software update is being characterized as a meaningful device upgrade, while the company’s Pro Series LX OLED televisions are now available through Amazon. These developments may improve user engagement, hardware visibility and the Roku ecosystem, although their direct effect on near-term financial results is likely limited. Roku's latest update is like a free upgrade for your device Roku's Pro Series LX OLED TVs Are Now Available on Amazon
• Neutral Sentiment: New Roku Channel programming, including Battle of the Streaming Stars, and the BBC series The Walsh Sisters could help content discovery and engagement, but the articles provide no evidence of material financial impact yet. Battle of the Streaming Stars debuts on Roku Channel The Walsh Sisters sells to Roku's Howdy
• Negative Sentiment: Roku insider Dan Jedda reportedly sold 7,000 shares. The transaction is a modest potential warning signal, although one insider sale alone does not establish a change in the company’s outlook. Roku insider Dan Jedda sells 7,000 shares

Analyst Ratings Changes

Several brokerages recently commented on ROKU. Guggenheim lowered shares of Roku from a "buy" rating to a "neutral" rating and increased their price objective for the stock from $145.00 to $160.00 in a research report on Friday, August 7th. Rosenblatt Securities reissued a "buy" rating and issued a $160.00 price objective on shares of Roku in a research note on Monday, August 10th. Citigroup boosted their target price on Roku from $120.00 to $157.00 and gave the company a "neutral" rating in a research report on Friday, July 17th. Needham & Company LLC reaffirmed a "buy" rating on shares of Roku in a research note on Friday, August 7th. Finally, 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. One analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating and nineteen have issued a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Hold" and an average target price of $156.17.

Roku Stock Up 1.4%

The stock's 50 day moving average price is $155.11 and its 200-day moving average price is $138.86. The stock has a market capitalization of $23.76 billion, a PE ratio of 68.40 and a beta of 2.05.

Roku (NASDAQ:ROKU - Get Free Report) last posted its quarterly earnings results on Thursday, August 6th. The company reported $1.08 EPS 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 company had revenue of $1.35 billion for the quarter, compared to the consensus estimate of $1.30 billion. During the same quarter last year, the firm posted $0.07 EPS. The firm's revenue was up 21.9% compared to the same quarter last year. As a group, sell-side analysts predict that Roku, Inc. will post 2.97 earnings per share for the current fiscal year.

Insider Activity at Roku

In related news, CFO Dan Jedda sold 7,000 shares of the stock in a transaction that occurred on Monday, August 17th. The stock was sold at an average price of $157.11, for a total value of $1,099,770.00. Following the transaction, the chief financial officer owned 65,963 shares of the company's stock, valued at $10,363,446.93. This represents a 9.59% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Mustafa Ozgen sold 3,410 shares of the firm's stock in a transaction on Wednesday, September 2nd. The stock was sold at an average price of $155.64, for a total value of $530,732.40. Following the transaction, the insider owned 25,569 shares in the company, valued at $3,979,559.16. The trade was a 11.77% decrease in their ownership of the stock. 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 three months, insiders sold 119,285 shares of company stock valued at $18,224,865. 13.45% of the stock is owned by insiders.

Institutional Investors Weigh In On Roku

A number of institutional investors and hedge funds have recently bought and sold shares of the company. Bayban raised its holdings in shares of Roku by 1,300.0% in the first quarter. Bayban now owns 280 shares of the company's stock valued at $26,000 after acquiring an additional 260 shares in the last quarter. CX Institutional lifted its stake in Roku by 44.1% in the third quarter. CX Institutional now owns 281 shares of the company's stock worth $43,000 after acquiring an additional 86 shares during the period. Elevation Wealth Partners LLC lifted its stake in Roku by 208.7% in the second quarter. Elevation Wealth Partners LLC now owns 318 shares of the company's stock worth $44,000 after acquiring an additional 215 shares during the period. Hilton Head Capital Partners LLC grew its holdings in Roku by 175.0% during the 1st quarter. Hilton Head Capital Partners LLC now owns 550 shares of the company's stock worth $52,000 after acquiring an additional 350 shares in the last quarter. Finally, WPG Advisers LLC grew its holdings in Roku by 96.8% during the 1st quarter. WPG Advisers LLC now owns 561 shares of the company's stock worth $53,000 after acquiring an additional 276 shares in the last quarter. 86.30% of the stock is owned by institutional investors.

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.