Roku (NASDAQ:ROKU) Trading 2.3% Higher - Time to Buy?

Key Points

• Roku shares rose 2.3% in Friday trading, reaching an intraday high of $130.72 and closing near $129.53 on lighter-than-average volume.
• The company’s latest earnings beat expectations, with Q1 EPS of $0.57 versus the $0.34 estimate and revenue of $1.25 billion, up 22.4% year over year.
• Analysts remain broadly constructive: multiple firms raised price targets, and Roku now has a consensus “Moderate Buy” rating with an average target of $142.17, though insider sales and a reported TV “bricking” lawsuit remain overhangs.

Shares of Roku, Inc. (NASDAQ:ROKU - Get Free Report) traded up 2.3% during mid-day trading on Friday . The stock traded as high as $130.72 and last traded at $129.53. 2,043,896 shares were traded during trading, a decline of 38% from the average session volume of 3,274,496 shares. The stock had previously closed at $126.67.

More Roku News

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Roku said CFO and COO Dan Jedda will speak at two upcoming industry conferences on May 12 and May 13, which can help keep investor attention on the company and give management a platform to discuss strategy and growth. Roku Chief Financial Officer to Present at Upcoming Conferences
• Neutral Sentiment: Several insider sale reports were published this week, including stock sales by a director and other executives, but these filings are routine disclosures and do not necessarily signal a change in business fundamentals. Roku NASDAQ: ROKU Director Sells $244,220.00 in Stock
• Negative Sentiment: News reports alleged that Roku and TCL software updates have “bricked” some TVs, which could raise concerns about product quality, customer trust, and potential legal or repair costs if the claims gain traction. Lawsuit accuses Roku, TCL of 'bricking' TVs with defective software updates

Analysts Set New Price Targets

A number of research analysts have recently issued reports on ROKU shares. Citigroup raised their price target on shares of Roku from $100.00 to $120.00 and gave the stock a "neutral" rating in a research report on Monday. Pivotal Research reaffirmed a "buy" rating and issued a $160.00 target price (up from $140.00) on shares of Roku in a research report on Friday, May 1st. Robert W. Baird upped their price target on shares of Roku from $120.00 to $130.00 and gave the stock an "outperform" rating in a research report on Friday, April 17th. Wedbush increased their price objective on shares of Roku from $140.00 to $155.00 and gave the stock an "outperform" rating in a report on Friday, May 1st. Finally, UBS Group reiterated an "outperform" rating and issued a $145.00 price objective on shares of Roku in a research report on Friday, May 1st. Twenty-one research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company. Based on data from MarketBeat, Roku currently has a consensus rating of "Moderate Buy" and a consensus price target of $142.17.

Roku Stock Performance

The firm has a 50 day simple moving average of $102.76 and a two-hundred day simple moving average of $101.52. The stock has a market cap of $19.10 billion, a P/E ratio of 97.39 and a beta of 2.04.

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

Insider Activity at Roku

In other news, CEO Anthony J. Wood sold 50,000 shares of the company's stock in a transaction that occurred on Tuesday, March 10th. The shares were sold at an average price of $99.68, for a total value of $4,984,000.00. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, CFO Dan Jedda sold 15,000 shares of the stock in a transaction that occurred on Monday, March 16th. The shares were sold at an average price of $94.23, for a total transaction of $1,413,450.00. Following the completion of the transaction, the chief financial officer owned 85,115 shares of the company's stock, valued at $8,020,386.45. This trade represents a 14.98% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 663,038 shares of company stock worth $70,956,545. 13.45% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Roku

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the company. Empowered Funds LLC lifted its holdings in shares of Roku by 18.6% in the first quarter. Empowered Funds LLC now owns 3,291 shares of the company's stock valued at $232,000 after buying an additional 515 shares during the period. Focus Partners Wealth acquired a new position in Roku during the first quarter worth about $229,000. EverSource Wealth Advisors LLC raised its position in Roku by 145.4% in 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 in the last quarter. First Trust Advisors LP raised its position in Roku by 231.0% in 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 in the last quarter. Finally, Brown Advisory Inc. acquired a new stake in Roku in the 2nd quarter valued at about $326,000. 86.30% of the stock is owned by institutional investors.

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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