Roku (NASDAQ:ROKU) Shares Up 2.1% on Earnings Beat

Key Points

• Roku shares rose 2.1% after the company reported quarterly earnings of $1.08 per share, beating expectations of $0.60, while revenue of $1.35 billion exceeded the $1.30 billion consensus.
• Despite the earnings beat, analyst sentiment remains cautious: Roku has an average rating of “Hold” and an average price target of $155.12, below its roughly $150 trading price.
• Insiders have sold about 226,733 shares worth $29.9 million over the past 90 days, although some transactions were made under pre-arranged Rule 10b5-1 plans; institutional investors own 86.3% of the stock.

Roku, Inc. (NASDAQ:ROKU - Get Free Report)'s stock price rose 2.1% during trading on Thursday following a better than expected earnings announcement. The company traded as high as $150.61 and last traded at $150.07. Approximately 3,814,299 shares traded hands during mid-day trading, an increase of 3% from the average session volume of 3,715,770 shares. The stock had previously closed at $146.96.

The company reported $1.08 earnings per share for the quarter, beating analysts' consensus estimates of $0.60 by $0.48. The business had revenue of $1.35 billion during the quarter, compared to analyst estimates of $1.30 billion. Roku had a net margin of 4.06% and a return on equity of 7.64%.

Roku News Summary

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Analysts are revising forecasts ahead of Roku’s earnings call, with investors focused on platform revenue, advertising demand, user engagement and management’s outlook. Strong results or guidance could provide additional support for the stock. Benzinga analyst forecast article
• Positive Sentiment: Roku expanded its free, ad-supported live-TV lineup with four new channels. The additional content may help increase viewing time and strengthen Roku’s advertising ecosystem, although the near-term financial impact is likely modest. Roku free live TV channels article
• Neutral Sentiment: An upcoming Aurzen Roku TV portable projector is being promoted at a preorder price below $70. The product could increase Roku-branded platform exposure, but it appears to be a third-party device and is unlikely to materially change near-term results. Android Authority projector article
• Negative Sentiment: Several insiders reported stock sales, including Charles Collier’s sale of 20,538 shares and additional sales by Director Neil Hunt and CAO Matthew Banks. Because the transactions were executed under pre-arranged Rule 10b5-1 plans, they are less conclusive as a signal of management’s outlook, but the sales may weigh modestly on sentiment. Roku insider trading article
• Negative Sentiment: Roku’s shares have approached a three-year high while trading at a high earnings multiple. This leaves limited room for disappointment: weaker device sales, slowing advertising growth or cautious guidance could prompt a sharp reaction following the earnings release. Schaeffers Research earnings article

Analysts Set New Price Targets

Several research analysts have recently commented on ROKU shares. KeyCorp downgraded Roku from an "overweight" rating to a "sector weight" rating in a research note on Monday, June 15th. Robert W. Baird reiterated a "neutral" rating and issued a $160.00 price target on shares of Roku in a research note on Monday, June 15th. Guggenheim raised their target price on shares of Roku from $140.00 to $145.00 and gave the company a "buy" rating in a report on Tuesday, June 9th. Oppenheimer downgraded shares of Roku from an "outperform" rating to a "market perform" rating in a report on Monday, June 15th. Finally, JPMorgan Chase & Co. reaffirmed a "neutral" rating and set a $160.00 price objective (up from $150.00) on shares of Roku in a research note on Tuesday, June 16th. Ten research analysts have rated the stock with a Buy rating and seventeen have issued a Hold rating to the stock. According to MarketBeat.com, the stock presently has an average rating of "Hold" and an average price target of $155.12.

Insider Buying and Selling at Roku

In other Roku news, insider Mustafa Ozgen sold 10,194 shares of Roku 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 transaction, the insider owned 19,185 shares in the company, valued at $2,762,640. The trade was a 34.70% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Charles Collier sold 20,538 shares of Roku stock in a transaction that occurred on Monday, July 6th. The stock was sold at an average price of $142.51, for a total transaction of $2,926,870.38. Following the completion of the transaction, the insider directly owned 15,200 shares in the company, valued at approximately $2,166,152. The trade was a 57.47% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 226,733 shares of company stock valued at $29,862,532 in the last ninety days. Company insiders own 13.45% of the company's stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the business. Blue Trust Inc. grew its stake in shares of Roku by 680.0% during the fourth quarter. Blue Trust Inc. now owns 234 shares of the company's stock worth $25,000 after acquiring an additional 204 shares during the last quarter. Bayban raised its holdings in shares of Roku by 1,300.0% during the first quarter. Bayban now owns 280 shares of the company's stock worth $26,000 after purchasing an additional 260 shares during the last quarter. WPG Advisers LLC purchased a new position in shares of Roku during the 4th quarter valued at about $31,000. Safe Harbor Fiduciary LLC purchased a new position in Roku during the fourth quarter valued at approximately $31,000. Finally, Elevation Wealth Partners LLC lifted its stake in shares of Roku by 208.7% in the 2nd quarter. Elevation Wealth Partners LLC now owns 318 shares of the company's stock valued at $44,000 after purchasing an additional 215 shares during the period. 86.30% of the stock is currently owned by hedge funds and other institutional investors.

Roku Stock Up 2.1%

The firm has a market cap of $22.12 billion, a price-to-earnings ratio of 112.84 and a beta of 2.01. The business's 50-day simple moving average is $137.55 and its two-hundred day simple moving average is $115.71.

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.

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.

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