Roku (NASDAQ:ROKU) Stock Price Down 2.6% - Here's What Happened

Key Points

• Roku's stock price fell by 2.6% on Tuesday, trading as low as $82.43, with a significant decline in trading volume compared to its average.
• Analysts have mixed opinions on Roku, with a consensus rating of "Moderate Buy" and an average price target of $98.96, with various firms adjusting their targets upwards.
• Despite reporting better-than-expected earnings with a revenue increase of 14.7% year-over-year, Roku still faces challenges with negative margins and analysts predicting a loss for the current year.

Roku, Inc. (NASDAQ:ROKU - Get Free Report) shares traded down 2.6% on Tuesday . The company traded as low as $82.43 and last traded at $83.63. 1,685,220 shares changed hands during mid-day trading, a decline of 58% from the average session volume of 4,009,431 shares. The stock had previously closed at $85.83.

Wall Street Analysts Forecast Growth

A number of equities research analysts recently weighed in on the company. UBS Group increased their price target on Roku from $72.00 to $95.00 and gave the company a "neutral" rating in a research note on Friday. Citigroup restated a "neutral" rating and issued a $84.00 price target (up previously from $68.00) on shares of Roku in a research note on Wednesday, June 18th. Redburn Atlantic upgraded Roku from a "neutral" rating to a "buy" rating and set a $100.00 price target on the stock in a research note on Monday, April 7th. Piper Sandler increased their price target on Roku from $65.00 to $84.00 and gave the company a "neutral" rating in a research note on Thursday, July 10th. Finally, Needham & Company LLC increased their price target on Roku from $100.00 to $110.00 and gave the company a "buy" rating in a research note on Friday. One research analyst has rated the stock with a sell rating, seven have given a hold rating, nineteen have given a buy rating and two have assigned a strong buy rating to the company's stock. According to data from MarketBeat.com, Roku currently has a consensus rating of "Moderate Buy" and an average price target of $98.96.

Roku Price Performance

The stock's 50-day moving average is $84.11 and its 200 day moving average is $77.05. The stock has a market cap of $12.20 billion, a price-to-earnings ratio of -198.49 and a beta of 2.05.

Roku (NASDAQ:ROKU - Get Free Report) last released its earnings results on Thursday, July 31st. The company reported $0.07 EPS for the quarter, topping the consensus estimate of ($0.16) by $0.23. Roku had a negative net margin of 1.40% and a negative return on equity of 2.47%. The firm had revenue of $1.11 billion during the quarter, compared to analysts' expectations of $1.07 billion. During the same period in the previous year, the company earned ($0.18) EPS. Roku's revenue for the quarter was up 14.7% on a year-over-year basis. Analysts anticipate that Roku, Inc. will post -0.3 EPS for the current year.

Insider Activity at Roku

In related news, CEO Anthony J. Wood sold 25,000 shares of the business's stock in a transaction dated Thursday, July 10th. The shares were sold at an average price of $89.64, for a total transaction of $2,241,000.00. Following the completion of the sale, the chief executive officer owned 11,953 shares of the company's stock, valued at $1,071,466.92. This represents a 67.65% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CFO Dan Jedda sold 3,000 shares of the company's stock in a transaction that occurred on Tuesday, July 15th. The stock was sold at an average price of $90.20, for a total transaction of $270,600.00. Following the completion of the sale, the chief financial officer directly owned 76,132 shares of the company's stock, valued at approximately $6,867,106.40. This represents a 3.79% decrease in their ownership of the stock. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 308,873 shares of company stock worth $28,076,913. Company insiders own 13.98% of the company's stock.

Institutional Trading of Roku

A number of hedge funds have recently bought and sold shares of the stock. United Advisor Group LLC increased its holdings in shares of Roku by 0.9% in the fourth quarter. United Advisor Group LLC now owns 14,430 shares of the company's stock valued at $1,073,000 after purchasing an additional 130 shares during the last quarter. DekaBank Deutsche Girozentrale increased its holdings in shares of Roku by 0.9% in the second quarter. DekaBank Deutsche Girozentrale now owns 15,550 shares of the company's stock valued at $1,369,000 after purchasing an additional 142 shares during the last quarter. Cerity Partners LLC increased its holdings in shares of Roku by 0.5% in the fourth quarter. Cerity Partners LLC now owns 26,679 shares of the company's stock valued at $1,984,000 after purchasing an additional 145 shares during the last quarter. Nissay Asset Management Corp Japan ADV increased its holdings in shares of Roku by 1.0% in the first quarter. Nissay Asset Management Corp Japan ADV now owns 15,575 shares of the company's stock valued at $1,097,000 after purchasing an additional 160 shares during the last quarter. Finally, True Vision MN LLC increased its holdings in shares of Roku by 3.3% in the second quarter. True Vision MN LLC now owns 5,544 shares of the company's stock valued at $487,000 after purchasing an additional 179 shares during the last quarter. 86.30% of the stock is owned by institutional investors.

About Roku

Roku, Inc, together with its subsidiaries, operates a TV streaming platform in the United states and internationally. The company operates in two segments, Platform and Devices. Its streaming platform allows users to find and access TV shows, movies, news, sports, and others. The Platform segment offers digital advertising, including direct and programmatic video advertising, media and entertainment promotional spending, and related services; and streaming services distribution, such as subscription and transaction revenue shares, and sale of premium subscriptions and branded app buttons on remote controls.

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