Roku (NASDAQ:ROKU) Upgraded by Zacks Research to "Strong-Buy" Rating

Key Points

• Zacks Research upgraded Roku to “Strong Buy” from “Hold,” although the broader analyst consensus remains “Hold,” with a $156.25 average price target.
• Roku reported quarterly EPS of $1.08 versus the $0.61 consensus estimate, while revenue reached $1.35 billion, up 21.9% year over year and above expectations.
• Roku shares opened at $151.79 near their 52-week high, while insiders sold more than $21.8 million of stock over the past three months; institutional investors own 86.3% of shares.

Roku (NASDAQ:ROKU - Get Free Report) was upgraded by equities researchers at Zacks Research from a "hold" rating to a "strong-buy" rating in a report released on Tuesday,Zacks.com reports.

Other equities research analysts have also recently issued reports about the company. Robert W. Baird reissued a "neutral" rating and issued a $160.00 target price on shares of Roku in a research note on Monday, June 15th. Piper Sandler cut Roku from an "overweight" rating to a "neutral" rating and raised their price target for the company from $148.00 to $160.00 in a report on Tuesday, June 16th. Citigroup lifted their price objective on Roku from $120.00 to $157.00 and gave the stock a "neutral" rating in a research report on Friday, July 17th. Pivotal Research restated a "buy" rating and set a $160.00 target price (up from $140.00) on shares of Roku in a research report on Friday, May 1st. Finally, Morgan Stanley raised their target price on shares of Roku from $150.00 to $170.00 and gave the company an "overweight" rating in a research note on Thursday, June 4th. One analyst has rated the stock with a Strong Buy rating, eight have given a Buy rating and eighteen have assigned a Hold rating to the stock. According to MarketBeat.com, Roku has an average rating of "Hold" and a consensus target price of $156.25.

Roku Trading Up 0.6%

Shares of NASDAQ ROKU opened at $151.79 on Tuesday. Roku has a 1-year low of $78.53 and a 1-year high of $153.54. The company has a 50-day moving average of $139.92 and a two-hundred day moving average of $117.37. The company has a market cap of $22.38 billion, a PE ratio of 64.87 and a beta of 2.01.

Roku (NASDAQ:ROKU - Get Free Report) last released its quarterly earnings results on Wednesday, August 5th. The company reported $1.08 EPS for the quarter, beating the consensus estimate of $0.61 by $0.47. Roku had a net margin of 6.82% and a return on equity of 13.73%. The business had revenue of $1.35 billion for the quarter, compared to analysts' expectations of $1.30 billion. During the same period in the prior year, the firm earned $0.07 earnings per share. Roku's revenue was up 21.9% compared to the same quarter last year. As a group, equities research analysts forecast that Roku will post 2.82 earnings per share for the current year.

Insiders Place Their Bets

In other Roku news, insider Charles Collier sold 20,538 shares of the stock in a transaction dated Monday, July 6th. The stock was sold at an average price of $142.51, for a total value of $2,926,870.38. Following the transaction, the insider owned 15,200 shares of the company's stock, valued at approximately $2,166,152. This represents a 57.47% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed 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 firm's stock in a transaction dated Friday, June 12th. The stock was sold at an average price of $130.00, for a total value of $3,250,000.00. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 162,452 shares of company stock worth $21,811,132 over the last three months. Insiders own 13.45% of the company's stock.

Institutional Trading of Roku

A number of hedge funds have recently modified their holdings of ROKU. Jefferies Financial Group Inc. acquired a new stake in shares of Roku in the fourth quarter valued at about $1,345,000. Moran Wealth Management LLC acquired a new position in Roku during the first quarter valued at approximately $2,990,000. Contravisory Investment Management Inc. bought a new position in Roku in the second quarter valued at approximately $1,184,000. California Public Employees Retirement System increased its position in shares of Roku by 14.8% during the 1st quarter. California Public Employees Retirement System now owns 260,774 shares of the company's stock worth $24,674,000 after purchasing an additional 33,593 shares during the last quarter. Finally, Katamaran Capital LLP increased its position in shares of Roku by 90.8% during the 1st quarter. Katamaran Capital LLP now owns 52,548 shares of the company's stock worth $4,972,000 after purchasing an additional 25,002 shares during the last quarter. 86.30% of the stock is currently owned by institutional investors and hedge funds.

Roku News Summary

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Analyst and momentum support: Rosenblatt Securities reaffirmed its “Buy” rating, and Zacks added Roku to its Rank #1 (Strong Buy) momentum list. Zacks also cited favorable earnings-estimate revisions as a reason Roku could continue moving higher. Rosenblatt Securities Reaffirms Buy Rating for Roku Why Roku Might Be Well Poised for a Surge
• Positive Sentiment: Programming expansion: Roku has added six free channels and launched additional original or themed programming, potentially increasing platform engagement, advertising inventory and the value of its streaming ecosystem. Roku Quietly Adds Six More Free Channels
• Neutral Sentiment: Potential Fox transaction: Reports describe how Lachlan Murdoch courted Roku in connection with a deal valued at approximately $22 billion. The transaction could create strategic and valuation implications, but investors will need clarity on terms, timing and the effect on Roku shareholders. How Lachlan Murdoch Courted Roku to Seal a $22 Billion Deal
• Neutral Sentiment: AI-generated channel: Roku launched Fairground TV, a 24/7 channel using AI-generated programming and advertising. The initiative could materially reduce content costs and provide a low-cost way to expand its ad-supported offering, but its commercial appeal remains unproven. AI Slop or Streaming’s Future? Inside Roku’s Fairground TV Gamble
• Negative Sentiment: Brand and content-quality concerns: Several reports sharply criticized Fairground TV as low-quality “AI slop.” Negative consumer and industry reaction could hurt Roku’s brand, viewer engagement and advertiser perception if the channel fails to attract audiences. Nightmare Fodder: Roku’s AI Slop Channel
• Negative Sentiment: Valuation and risk concerns: A Seeking Alpha analysis recommended selling alongside insiders and highlighted debt, execution risks and uncertainty around potential Fox synergies, tempering the bullish analyst commentary. Roku: Sell Alongside Insiders

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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