Roku (NASDAQ:ROKU) Trading Down 3.2% - Should You Sell?

Key Points

• Roku shares fell 3.2% during mid-day trading, reaching a low of $82.01, with trading volume significantly below average at approximately 1.5 million shares.
• The company recently reported earnings of $0.07 per share, exceeding analysts' expectations, with a revenue increase of 14.7% year-over-year.
• While several analysts maintain a positive outlook with ratings ranging from "hold" to "strong buy", the consensus price target for Roku is $98.96.

Shares of Roku, Inc. (NASDAQ:ROKU - Get Free Report) were down 3.2% during mid-day trading on Thursday . The stock traded as low as $82.01 and last traded at $82.20. Approximately 1,496,120 shares changed hands during mid-day trading, a decline of 63% from the average daily volume of 4,016,836 shares. The stock had previously closed at $84.93.

Analyst Upgrades and Downgrades

Several equities analysts have commented on ROKU shares. Wedbush reissued an "outperform" rating and set a $100.00 target price on shares of Roku in a research report on Monday, July 28th. Evercore ISI decreased their target price on Roku from $105.00 to $80.00 and set an "in-line" rating for the company in a research report on Friday, May 2nd. JPMorgan Chase & Co. boosted their price objective on shares of Roku from $100.00 to $105.00 and gave the stock an "overweight" rating in a research note on Friday, August 1st. Wells Fargo & Company boosted their target price on shares of Roku from $100.00 to $113.00 and gave the stock an "overweight" rating in a research report on Friday, August 1st. Finally, Citigroup reaffirmed a "neutral" rating and issued a $84.00 price target (up from $68.00) on shares of Roku in a research report on Wednesday, June 18th. One research analyst has rated the stock with a sell rating, seven have assigned a hold rating, nineteen have issued a buy rating and two have issued a strong buy rating to the company. According to MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus price target of $98.96.

Roku Stock Down 2.1%

The stock has a fifty day moving average of $84.56 and a 200-day moving average of $77.15. The firm has a market capitalization of $12.13 billion, a P/E ratio of -197.88, a PEG ratio of 11.71 and a beta of 2.05.

Roku (NASDAQ:ROKU - Get Free Report) last issued its quarterly earnings results on Thursday, July 31st. The company reported $0.07 earnings per share for the quarter, beating analysts' consensus estimates of ($0.16) by $0.23. Roku had a negative net margin of 1.40% and a negative return on equity of 2.44%. The business had revenue of $1.11 billion during the quarter, compared to analyst estimates of $1.07 billion. During the same quarter last year, the business posted ($0.18) earnings per share. Roku's revenue for the quarter was up 14.7% compared to the same quarter last year. As a group, analysts forecast that Roku, Inc. will post -0.3 EPS for the current fiscal year.

Insider Buying and Selling at Roku

In related news, CEO Anthony J. Wood sold 25,000 shares of Roku stock in a transaction on Thursday, July 10th. The stock was 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 directly owned 11,953 shares of the company's stock, valued at $1,071,466.92. The trade was a 67.65% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, insider Charles Collier sold 212,559 shares of the company's stock in a transaction dated Monday, July 21st. The shares were sold at an average price of $95.00, for a total value of $20,193,105.00. Following the completion of the sale, the insider owned 200 shares of the company's stock, valued at $19,000. This represents a 99.91% decrease in their position. The disclosure for this sale can be found here. Insiders sold a total of 312,233 shares of company stock valued at $28,362,681 over the last 90 days. Company insiders own 13.98% of the company's stock.

Institutional Trading of Roku

Institutional investors and hedge funds have recently modified their holdings of the stock. Norges Bank bought a new stake in shares of Roku during the fourth quarter worth $4,351,000. O Shaughnessy Asset Management LLC acquired a new position in shares of Roku during the fourth quarter worth about $272,000. Resona Asset Management Co. Ltd. bought a new position in shares of Roku during the fourth quarter worth about $2,697,000. Russell Investments Group Ltd. lifted its stake in Roku by 265.4% in the 4th quarter. Russell Investments Group Ltd. now owns 265,062 shares of the company's stock valued at $19,715,000 after acquiring an additional 192,520 shares in the last quarter. Finally, Cerity Partners LLC grew its stake in shares of Roku by 0.5% during the 4th quarter. Cerity Partners LLC now owns 26,679 shares of the company's stock worth $1,984,000 after acquiring an additional 145 shares in the last quarter. 86.30% of the stock is owned by institutional investors.

Roku Company Profile

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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