Roku (NASDAQ:ROKU) Stock Price Down 2.9% Following Insider Selling

Key Points

• Roku shares fell 2.9% after insider selling news, with the stock trading as low as $119.59 during the session before closing lower. Trading volume also came in below average.
• CFO Dan Jedda sold 7,000 shares for about $857,920, and CEO Anthony J. Wood previously sold 75,000 shares for about $9.66 million. Both transactions were made under pre-arranged Rule 10b5-1 plans.
• Despite the pullback, analyst sentiment remains mostly constructive, with 21 Buy ratings and a consensus Moderate Buy rating. Roku also recently beat earnings estimates and posted strong revenue growth in its latest quarter.

Roku, Inc. (NASDAQ:ROKU - Get Free Report) dropped 2.9% on Tuesday after an insider sold shares in the company. The company traded as low as $119.59 and last traded at $120.58. Approximately 2,399,893 shares changed hands during trading, a decline of 25% from the average daily volume of 3,193,129 shares. The stock had previously closed at $124.15.

Specifically, CFO Dan Jedda sold 7,000 shares of Roku stock in a transaction on Friday, May 15th. The shares were sold at an average price of $122.56, for a total transaction of $857,920.00. Following the sale, the chief financial officer directly owned 71,115 shares in the company, valued at $8,715,854.40. This trade represents a 8.96% decrease in their position. The sale was disclosed in a legal filing 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, CEO Anthony J. Wood sold 75,000 shares of Roku stock in a transaction on Monday, May 11th. The stock was sold at an average price of $128.79, for a total transaction of $9,659,250.00. 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.

Analyst Ratings Changes

ROKU has been the topic of several research analyst reports. Piper Sandler lifted their price target on shares of Roku from $140.00 to $148.00 and gave the stock an "overweight" rating in a research note on Friday, May 1st. Zacks Research lowered shares of Roku from a "strong-buy" rating to a "hold" rating in a research note on Tuesday, April 14th. Jefferies Financial Group lifted their price target on shares of Roku from $135.00 to $140.00 and gave the stock a "buy" rating in a research note on Monday, April 13th. Pivotal Research reiterated a "buy" rating and set a $160.00 price target (up from $140.00) on shares of Roku in a research note on Friday, May 1st. Finally, Evercore reiterated an "outperform" rating and set a $150.00 price target on shares of Roku in a research note on Friday, February 13th. Twenty-one equities research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company's stock. According to MarketBeat, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $143.42.

Key Stories Impacting Roku

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Roku launched a new creator-focused hub and additional FAST channels, expanding its content offerings and giving the platform another way to attract viewers and ad dollars. Roku Doubling Down on Creators With Dedicated Destination and New FAST Channels (Exclusive)
• Positive Sentiment: Roku also secured exclusive streaming rights to the inaugural Enhanced Games, adding a new live-sports property that could strengthen engagement and support the company’s ad-supported streaming strategy. Roku’s Exclusive Enhanced Games Deal Adds Fresh Angle To Valuation Story
• Positive Sentiment: Market commentary highlighted Roku’s recent uptrend and suggested a bullish options trade, reinforcing the view that traders remain optimistic about near-term momentum. This Bullish Roku Trade Seeks A Quick 30% Profit
• Neutral Sentiment: Roku CFO Dan Jedda sold 7,000 shares under a pre-arranged 10b5-1 plan. While the sale was disclosed cleanly and appears routine, insider selling can still weigh on sentiment. Roku NASDAQ: ROKU CFO Sells $857,920.00 in Stock
• Negative Sentiment: Roku-related software update complaints involving Roku and TCL TVs could raise some concern about product reliability and customer experience, though this appears more anecdotal than financially material. Roku and TCL TV viewers say software update made their flatscreens unusable — is yours on the list?

Roku Stock Performance

The company has a market capitalization of $17.78 billion, a PE ratio of 90.66 and a beta of 2.04. The company's 50-day simple moving average is $107.02 and its 200-day simple moving average is $102.95.

Roku (NASDAQ:ROKU - Get Free Report) last issued its earnings results on Thursday, April 30th. The company reported $0.57 earnings per share for the quarter, beating the consensus estimate of $0.34 by $0.23. The business had revenue of $1.25 billion for 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 business's quarterly revenue was up 22.4% compared to the same quarter last year. During the same quarter in the previous year, the firm earned ($0.19) earnings per share. Analysts expect that Roku, Inc. will post 2.41 EPS for the current year.

Institutional Trading of Roku

Several hedge funds and other institutional investors have recently made changes to their positions in ROKU. AQR Capital Management LLC boosted its holdings in shares of Roku by 275.5% in the third quarter. AQR Capital Management LLC now owns 2,586,125 shares of the company's stock valued at $258,897,000 after acquiring an additional 1,897,407 shares in the last quarter. Arrowstreet Capital Limited Partnership boosted its holdings in shares of Roku by 229.5% in the first quarter. Arrowstreet Capital Limited Partnership now owns 2,038,347 shares of the company's stock valued at $192,868,000 after acquiring an additional 1,419,772 shares in the last quarter. Fred Alger Management LLC boosted its holdings in shares of Roku by 7,087.7% in the fourth quarter. Fred Alger Management LLC now owns 1,421,440 shares of the company's stock valued at $154,212,000 after acquiring an additional 1,401,664 shares in the last quarter. Holocene Advisors LP boosted its holdings in shares of Roku by 352.3% in the third quarter. Holocene Advisors LP now owns 1,650,448 shares of the company's stock valued at $165,259,000 after acquiring an additional 1,285,585 shares in the last quarter. Finally, Norges Bank purchased a new stake in shares of Roku in the fourth quarter valued at about $92,808,000. Hedge funds and other 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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