Roku (NASDAQ:ROKU) Stock Price Down 2.7% - Here's Why

Key Points

• Roku shares fell 2.7% on Friday, trading as low as $120.66 before settling at $122.26, below the prior close of $125.59.
• Despite the pullback, analysts remain mostly upbeat: the stock has 22 Buy ratings and four Hold ratings, with an average target price of $145.29 and several firms recently raising price targets.
• Roku’s latest earnings beat expectations, with EPS of $0.57 versus $0.34 expected and revenue of $1.25 billion, up 22.4% year over year; however, insiders recently sold shares under pre-arranged trading plans.

Roku, Inc. (NASDAQ:ROKU - Get Free Report)'s share price was down 2.7% on Friday . The company traded as low as $120.66 and last traded at $122.26. Approximately 1,966,640 shares changed hands during mid-day trading, a decline of 35% from the average daily volume of 3,042,151 shares. The stock had previously closed at $125.59.

Wall Street Analysts Forecast Growth

A number of research analysts have weighed in on ROKU shares. Susquehanna raised their price objective on shares of Roku from $130.00 to $160.00 and gave the company a "positive" rating in a research note on Friday, May 1st. KeyCorp raised their price objective on shares of Roku from $140.00 to $150.00 and gave the company an "overweight" rating in a research note on Friday, May 1st. Citizens Jmp reaffirmed a "market outperform" rating and issued a $170.00 price objective on shares of Roku in a research note on Thursday, May 28th. Moffett Nathanson reiterated a "neutral" rating and issued a $100.00 target price on shares of Roku in a report on Friday, February 13th. Finally, Stifel Nicolaus set a $160.00 target price on shares of Roku in a report on Monday, March 2nd. Twenty-two research analysts have rated the stock with a Buy rating and four have given a Hold rating to the company's stock. According to data from MarketBeat, the company has an average rating of "Moderate Buy" and an average price target of $145.29.

Roku Price Performance

The company's fifty day moving average price is $114.77 and its 200 day moving average price is $105.03. The company has a market cap of $18.02 billion, a PE ratio of 91.93 and a beta of 2.06.

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

Insiders Place Their Bets

In other Roku news, insider Gilbert Fuchsberg sold 4,376 shares of Roku stock in a transaction dated Tuesday, June 2nd. The shares were sold at an average price of $127.26, for a total value of $556,889.76. Following the sale, the insider owned 51,099 shares of the company's stock, valued at approximately $6,502,858.74. The trade was a 7.89% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. 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. Also, SVP Christopher T. Handman sold 2,999 shares of Roku stock in a transaction dated Tuesday, June 2nd. The stock was sold at an average price of $127.26, for a total transaction of $381,652.74. Following the completion of the sale, the senior vice president directly owned 5,998 shares in the company, valued at approximately $763,305.48. This represents a 33.33% decrease in their position. The disclosure for this sale is available in the SEC filing. 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 quarter, insiders have sold 696,631 shares of company stock valued at $77,636,680. Company insiders own 13.45% of the company's stock.

Institutional Trading of Roku

Several hedge funds have recently added to or reduced their stakes in the stock. Vanguard Group Inc. raised its position in Roku by 2.5% in the third quarter. Vanguard Group Inc. now owns 12,998,674 shares of the company's stock worth $1,301,557,000 after acquiring an additional 322,858 shares during the period. AQR Capital Management LLC raised its position in Roku by 10.6% in the fourth quarter. AQR Capital Management LLC now owns 2,860,149 shares of the company's stock worth $310,298,000 after acquiring an additional 274,024 shares during the period. Geode Capital Management LLC raised its position in Roku by 7.3% in the fourth quarter. Geode Capital Management LLC now owns 2,464,130 shares of the company's stock worth $267,389,000 after acquiring an additional 168,214 shares during the period. Arrowstreet Capital Limited Partnership raised its position in 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 acquiring an additional 1,419,772 shares during the period. Finally, Holocene Advisors LP raised its position in Roku by 352.3% in the third quarter. Holocene Advisors LP now owns 1,650,448 shares of the company's stock worth $165,259,000 after acquiring an additional 1,285,585 shares during the period. Institutional investors own 86.30% of the company's stock.

About Roku

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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