Roku (NASDAQ:ROKU) Trading Down 3.9% - Should You Sell?

Key Points

• Roku shares fell 3.9% to $114.11 on Tuesday with volume about 15% below average; analysts remain largely positive (21 Buys vs. 5 Holds) with an average price target of $128.21 and several firms raising targets toward $140.
• Roku beat expectations for the quarter with EPS of $0.53 vs. $0.28 expected and revenue of $1.39 billion vs. $1.35 billion, with revenue up 16.1% year-over-year; the company has a market cap of $16.82 billion and a trailing PE around 200.
• Notable insider selling occurred (CEO sold 25,000 shares; director sold 2,000; insiders sold 426,375 shares worth ~$43.4M last quarter) while institutional investors hold roughly 86.3% of the stock.

Roku, Inc. (NASDAQ:ROKU - Get Free Report)'s share price traded down 3.9% on Tuesday . The company traded as low as $113.46 and last traded at $114.11. 2,800,191 shares were traded during trading, a decline of 15% from the average session volume of 3,301,928 shares. The stock had previously closed at $118.73.

Analysts Set New Price Targets

A number of research analysts recently weighed in on the stock. Jefferies Financial Group increased their price objective on shares of Roku from $135.00 to $140.00 and gave the company a "buy" rating in a research report on Monday, April 13th. Pivotal Research increased their price objective on shares of Roku from $135.00 to $140.00 and gave the company a "buy" rating in a research report on Monday, February 16th. Oppenheimer increased their price objective on shares of Roku from $105.00 to $120.00 and gave the company an "outperform" rating in a research report on Friday, February 13th. Needham & Company LLC restated a "buy" rating and set a $110.00 price objective on shares of Roku in a research report on Friday, February 13th. Finally, Piper Sandler restated an "overweight" rating and set a $140.00 price objective (up from $135.00) on shares of Roku in a research report on Friday, February 13th. Twenty-one investment analysts have rated the stock with a Buy rating and five have given a Hold rating to the stock. According to data from MarketBeat.com, Roku currently has an average rating of "Moderate Buy" and an average price target of $128.21.

Roku Stock Down 3.9%

The firm has a market capitalization of $16.82 billion, a PE ratio of 200.20 and a beta of 2.00. The stock's fifty day simple moving average is $96.24 and its 200 day simple moving average is $99.96.

Roku (NASDAQ:ROKU - Get Free Report) last announced its earnings results on Thursday, February 12th. The company reported $0.53 EPS for the quarter, beating analysts' consensus estimates of $0.28 by $0.25. Roku had a net margin of 1.87% and a return on equity of 3.40%. The business had revenue of $1.39 billion during the quarter, compared to analysts' expectations of $1.35 billion. During the same period in the prior year, the company earned ($0.24) earnings per share. The firm's revenue was up 16.1% on a year-over-year basis. On average, analysts predict that Roku, Inc. will post 2.1 EPS for the current year.

Insider Buying and Selling at Roku

In other Roku news, Director Neil D. Hunt sold 2,000 shares of the company's stock in a transaction that occurred on Wednesday, April 1st. The shares were sold at an average price of $95.54, for a total transaction of $191,080.00. Following the completion of the sale, the director directly owned 7,782 shares of the company's stock, valued at approximately $743,492.28. This represents a 20.45% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Anthony J. Wood sold 25,000 shares of the company's stock in a transaction that occurred on Thursday, April 16th. The shares were sold at an average price of $110.19, for a total transaction of $2,754,750.00. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 426,375 shares of company stock valued at $43,390,928 in the last quarter. Insiders own 13.98% of the company's stock.

Institutional Inflows and Outflows

Large investors have recently modified their holdings of the company. Friedenthal Financial boosted its holdings in Roku by 15,317.6% in the 1st quarter. Friedenthal Financial now owns 10,484 shares of the company's stock worth $992,000 after buying an additional 10,416 shares during the period. Hilton Head Capital Partners LLC raised its holdings in Roku by 175.0% during the first quarter. Hilton Head Capital Partners LLC now owns 550 shares of the company's stock valued at $52,000 after acquiring an additional 350 shares during the period. OP Asset Management Ltd bought a new stake in Roku during the first quarter valued at about $267,000. Assenagon Asset Management S.A. lifted its position in shares of Roku by 24.7% in the first quarter. Assenagon Asset Management S.A. now owns 1,162,051 shares of the company's stock valued at $109,953,000 after acquiring an additional 230,398 shares in the last quarter. Finally, SG Americas Securities LLC boosted its stake in shares of Roku by 56.0% in the first quarter. SG Americas Securities LLC now owns 149,670 shares of the company's stock worth $14,162,000 after acquiring an additional 53,731 shares during the period. 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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