Roku (NASDAQ:ROKU) Trading Down 1.9% on Insider Selling

Key Points

• Roku shares fell 1.9% in midday trading after recent insider selling, with volume surging to more than 27 million shares, well above the daily average.
• CEO Anthony J. Wood and other insiders disclosed stock sales, including a $3.25 million sale by Wood under a pre-arranged Rule 10b5-1 plan and additional sales by Mustafa Ozgen and director Mai Fyfield.
• Analyst sentiment remains mixed: Jefferies cut Roku to hold, while other firms raised targets, leaving the stock with a moderate buy consensus and an average price target of $149.25.

Roku, Inc. (NASDAQ:ROKU - Get Free Report)'s share price traded down 1.9% during mid-day trading on Monday following insider selling activity. The stock traded as low as $139.64 and last traded at $140.90. 27,024,642 shares changed hands during trading, an increase of 705% from the average session volume of 3,356,796 shares. The stock had previously closed at $143.66.

Specifically, CEO Anthony J. Wood sold 25,000 shares of the stock in a transaction dated Friday, June 12th. The stock was sold at an average price of $130.00, for a total transaction of $3,250,000.00. The sale was disclosed in a document filed with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Mustafa Ozgen sold 10,194 shares of the stock in a transaction dated Friday, June 12th. The shares were 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. This trade represents a 34.70% decrease in their ownership of the stock. 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. In other news, Director Mai Fyfield sold 832 shares of the stock in a transaction dated Thursday, June 11th. The stock was sold at an average price of $119.64, for a total transaction of $99,540.48. Following the transaction, the director directly owned 5,389 shares in the company, valued at approximately $644,739.96. This represents a 13.37% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards.

Analysts Set New Price Targets

Several equities analysts have recently commented on the company. Jefferies Financial Group lowered Roku from a "buy" rating to a "hold" rating and set a $160.00 price objective on the stock. in a research report on Monday. Benchmark increased their price objective on Roku from $130.00 to $160.00 and gave the company a "buy" rating in a research report on Friday, May 1st. Needham & Company LLC increased their target price on Roku from $140.00 to $170.00 and gave the company a "buy" rating in a report on Monday. Stifel Nicolaus set a $160.00 target price on Roku in a report on Monday, March 2nd. Finally, KeyCorp cut Roku from an "overweight" rating to a "sector weight" rating in a report on Monday. Eighteen research analysts have rated the stock with a Buy rating and nine have assigned a Hold rating to the company. Based on data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average price target of $149.25.

Key Headlines Impacting Roku

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Fox agreed to buy Roku for about $22 billion, paying $160 per share in cash and stock. The deal gives Roku shareholders a major takeover premium and explains the stock’s surge. Reuters: Fox to buy Roku in $22 billion deal
• Positive Sentiment: Multiple reports say the acquisition could create a larger streaming and TV-viewership platform by combining Fox’s content with Roku’s connected-TV operating system and ad network, which supports the strategic case for the deal. CNBC: Fox to buy streaming device maker Roku for $22 billion
• Neutral Sentiment: Analysts and commentary note that the takeover premium may be viewed as modest by some shareholders, which could limit additional upside unless a competing bidder emerges or deal terms change. Barron's: Roku Stock Rises. Why $22 Billion Fox Sale May Disappoint.
• Negative Sentiment: Law firms have launched shareholder investigations into whether Roku obtained a fair price in the transaction, creating potential legal overhang and deal uncertainty. PR Newswire: Ademi LLP investigation
• Negative Sentiment: Another shareholder alert from Monteverde & Associates is also probing the sale to Fox, reinforcing concerns that investors may challenge the merger terms. PR Newswire: Monteverde & Associates investigation

Roku Trading Down 1.9%

The company has a market cap of $20.77 billion, a PE ratio of 105.94 and a beta of 2.06. The stock has a 50 day moving average price of $118.73 and a 200 day moving average price of $106.32.

Roku (NASDAQ:ROKU - Get Free Report) last released its earnings results on Thursday, April 30th. The company reported $0.57 EPS for the quarter, beating analysts' consensus estimates 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 firm's revenue for the quarter was up 22.4% compared to the same quarter last year. During the same quarter last year, the business posted ($0.19) EPS. Equities analysts expect that Roku, Inc. will post 2.41 EPS for the current fiscal year.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Parallel Advisors LLC increased its position in Roku by 27.8% during the 1st quarter. Parallel Advisors LLC now owns 2,426 shares of the company's stock valued at $230,000 after buying an additional 528 shares in the last quarter. Glenmede Trust Co. NA increased its position in Roku by 225.1% during the 1st quarter. Glenmede Trust Co. NA now owns 245,468 shares of the company's stock valued at $23,226,000 after buying an additional 169,960 shares in the last quarter. Royal Fund Management LLC bought a new position in Roku during the 1st quarter valued at approximately $365,000. Bank of America Corp DE increased its position in Roku by 5.5% during the 1st quarter. Bank of America Corp DE now owns 1,082,755 shares of the company's stock valued at $102,450,000 after buying an additional 56,893 shares in the last quarter. Finally, Janus Henderson Group PLC increased its position in Roku by 1,320.4% during the 1st quarter. Janus Henderson Group PLC now owns 834,619 shares of the company's stock valued at $78,967,000 after buying an additional 775,861 shares in the last quarter. Institutional investors own 86.30% of the company's stock.

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.

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