Roku (NASDAQ:ROKU) Rating Lowered to Hold at Evercore

Key Points

• Evercore downgraded Roku from “strong-buy” to “hold,” even as the stock has drawn mixed Wall Street opinions with an average analyst rating of Hold and an average target price of $153.71.
• Roku shares fell 2.1% and were trading around $137.95, near their 52-week high of $148.88, after a strong run above both the 50-day and 200-day moving averages.
• Recent financials were solid, with Roku reporting $0.57 EPS on $1.25 billion in revenue for the latest quarter, beating estimates and posting 22.4% year-over-year revenue growth.

Roku (NASDAQ:ROKU - Get Free Report) was downgraded by research analysts at Evercore from a "strong-buy" rating to a "hold" rating in a note issued to investors on Monday,Zacks.com reports.

Several other research firms also recently weighed in on ROKU. Weiss Ratings reiterated a "hold (c-)" rating on shares of Roku in a research report on Friday, May 15th. Robert W. Baird reiterated a "neutral" rating and set a $160.00 target price on shares of Roku in a research report on Monday. Guggenheim increased their target price on Roku from $140.00 to $145.00 and gave the stock a "buy" rating in a research report on Tuesday, June 9th. Piper Sandler downgraded Roku from an "overweight" rating to a "neutral" rating and increased their target price for the stock from $148.00 to $160.00 in a research report on Tuesday. Finally, Pivotal Research reiterated a "buy" rating and set a $160.00 target price (up from $140.00) on shares of Roku in a research report on Friday, May 1st. Eleven research analysts have rated the stock with a Buy rating and sixteen have given a Hold rating to the stock. According to MarketBeat.com, Roku currently has an average rating of "Hold" and an average target price of $153.71.

Roku Stock Down 2.1%

Shares of NASDAQ:ROKU opened at $137.95 on Monday. Roku has a 52-week low of $77.64 and a 52-week high of $148.88. The stock's fifty day simple moving average is $120.40 and its 200-day simple moving average is $106.95. The company has a market capitalization of $20.34 billion, a P/E ratio of 103.72 and a beta of 2.06.

Roku (NASDAQ:ROKU - Get Free Report) last issued its quarterly earnings data on Thursday, April 30th. The company reported $0.57 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.34 by $0.23. Roku had a return on equity of 7.64% and a net margin of 4.06%.The business had revenue of $1.25 billion for the quarter, compared to the consensus estimate of $1.20 billion. During the same period in the prior year, the business earned ($0.19) earnings per share. The business's revenue was up 22.4% on a year-over-year basis. On average, sell-side analysts anticipate that Roku will post 2.41 earnings per share for the current year.

Insider Activity at Roku

In other Roku news, CEO Anthony J. Wood sold 25,000 shares of the company's stock in a transaction dated Friday, June 12th. The stock was sold at an average price of $130.00, for a total transaction of $3,250,000.00. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Mustafa Ozgen sold 10,194 shares of the company's stock in a transaction dated Friday, June 12th. The stock was sold at an average price of $144.00, for a total value of $1,467,936.00. Following the sale, the insider owned 19,185 shares of the company's stock, valued at $2,762,640. This represents a 34.70% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 713,194 shares of company stock valued at $81,763,589 over the last three months. Insiders own 13.45% of the company's stock.

Institutional Investors Weigh In On Roku

Several institutional investors and hedge funds have recently added to or reduced their stakes in ROKU. Empowered Funds LLC increased its stake in Roku by 18.6% during the first quarter. Empowered Funds LLC now owns 3,291 shares of the company's stock worth $232,000 after acquiring an additional 515 shares during the last quarter. Focus Partners Wealth acquired a new stake in Roku during the first quarter worth about $229,000. EverSource Wealth Advisors LLC increased its stake in Roku by 145.4% during the second quarter. EverSource Wealth Advisors LLC now owns 1,394 shares of the company's stock worth $123,000 after acquiring an additional 826 shares during the last quarter. First Trust Advisors LP increased its stake in Roku by 231.0% during the second quarter. First Trust Advisors LP now owns 70,786 shares of the company's stock worth $6,221,000 after acquiring an additional 49,399 shares during the last quarter. Finally, Brown Advisory Inc. acquired a new stake in Roku during the second quarter worth about $326,000. 86.30% of the stock is currently owned by institutional investors and hedge funds.

Trending Headlines about Roku

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Fox agreed to buy Roku (ROKU) for about $22 billion, valuing shares at $160 each and giving Roku holders cash plus Fox stock; the deal has driven takeover speculation and a higher valuation for the company. Fox to buy Roku in $22 billion deal
• Positive Sentiment: Several Wall Street firms raised or reiterated bullish views on Roku (ROKU), including higher price targets around $160 to $175, supporting the stock after the acquisition news. Analyst updates on Roku
• Neutral Sentiment: Law firms have begun investigating whether the proposed Fox deal gives Roku (ROKU) shareholders a fair price, which adds some uncertainty but does not change the deal terms yet. Fairness investigation into Roku sale
• Negative Sentiment: Roku CFO Dan Jedda sold 7,000 shares under a pre-arranged trading plan, which may weigh on sentiment even though the sale was disclosed as routine. Roku insider sale

Roku Company Profile

Roku, Inc NASDAQ: ROKU is a technology company that develops and operates a proprietary streaming platform designed to deliver entertainment content to consumers via internet-connected devices and smart televisions. Since its inception in 2002 in California, Roku has focused on simplifying access to streaming services for viewers worldwide. The company's platform enables users to discover, access and manage a wide array of over-the-top content from major streaming services, free ad-supported channels and niche providers.

At the core of Roku's product lineup are a range of streaming players and sticks, which connect to televisions via HDMI and deliver the Roku OS experience.

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