Roku (NASDAQ:ROKU) Shares Down 1% - Should You Sell?

Roku, Inc. (NASDAQ:ROKU) experienced a 1% decline in its share price during mid-day trading on Friday. The stock dropped as low as $70.77 and was last recorded at $71.31, with approximately 638,677 shares changing hands, reflecting a significant decrease of 86% compared to its average daily trading volume of 4,425,522 shares. The previous closing price was $72.03.

Analyst Upgrades and Downgrades

Recently, several financial analysts shared their perspectives on Roku shares. Notably, Wells Fargo & Company raised their price target for Roku from $72.00 to $74.00, issuing an "equal weight" rating in a report dated October 31st. Guggenheim also upgraded Roku from a "neutral" to a "buy" rating, setting a target price of $75.00 in a research note on August 23rd. Furthermore, Rosenblatt Securities increased their target from $61.00 to $86.00 while maintaining a "neutral" rating. Citigroup elevated their target from $60.00 to $77.00, also with a "neutral" rating, and JPMorgan Chase & Co. raised their price target from $90.00 to $92.00, rating it as "overweight" on October 10th. Among analysts, two have assigned sell ratings, nine suggest holding, and twelve advocate a buying position for the stock. The consensus rating is currently classified as "Hold" with an average price target of $83.95.

Roku Stock Performance

The stock has exhibited a 50-day simple moving average of $73.35 and a 200-day simple moving average of $64.05. Roku’s market capitalization stands at approximately $10.72 billion, with a price-to-earnings ratio of -59.42 and a beta value of 2.07. Most recently, Roku announced its earnings results on October 30th. The company reported earnings of ($0.06) per share (EPS), surpassing analysts’ expectations, which predicted a loss of ($0.35) EPS by $0.29. The reported revenue was $1.06 billion, exceeding forecasts of $1.02 billion, marking a 16.5% year-over-year increase. In the same quarter the previous year, Roku had reported an EPS of ($2.33). Analysts predict that Roku will post -1.1 EPS for the current fiscal year.

Insiders Place Their Bets

In related developments, Roku’s CFO, Dan Jedda, sold 1,000 shares on October 15th at an average price of $76.25, totaling $76,250.00. After the transaction, he retains ownership of 53,267 shares valued at approximately $4,061,608.75, indicating no change in his position percentage. This transaction has been disclosed in a filing with the SEC. Additionally, Roku's CEO, Anthony J. Wood, sold 25,000 shares on September 12th for a total of $1,875,000.00 at an average sale price of $75.00. Following this sale, he holds 5,020 shares valued around $376,500, with again no change in percentage ownership. Over the last three months, insiders have sold a total of 69,776 shares worth $5,267,305, with corporate insiders now owning 13.98% of the company's total shares.

Institutional Inflows and Outflows

Several institutional investors have recently adjusted their stakes in Roku. ARK Investment Management LLC increased its holdings by 1.3% during the second quarter, acquiring a total of 12,716,432 shares valued at approximately $762,096,000. Vanguard Group Inc. raised its investment by 0.8% in the first quarter, now holding 11,946,605 shares worth about $778,560,000. The Bank of New York Mellon Corp boosted its position by 5.2% in the second quarter, owning now 500,794 shares worth approximately $30,013,000 after adding 24,926 shares recently. In the third quarter, Swiss National Bank increased its holdings by 1.3%, ending up with 376,800 shares worth $28,132,000 following a purchase of 5,000 shares. Additionally, Canada Pension Plan Investment Board grew its stake by a notable 138.1% in the first quarter, now possessing 342,400 shares valued at $22,314,000. Overall, approximately 86.30% of Roku’s stock is owned by institutional investors and hedge funds.

Roku Company Profile

Roku, Inc., along with its subsidiaries, offers a streaming platform both in the United States and globally. The company operates in two primary divisions: Platform and Devices. The Roku streaming platform enables users to discover and access a variety of TV shows, movies, news, sports, and more. The Platform segment is focused on digital advertising, including both direct and programmatic video advertising, and provides services related to media and entertainment promotional spending. Additionally, it covers streaming service distribution through subscription and transaction revenue shares, along with sales of premium subscriptions and branded app buttons on remote controls.

Investing Considerations

For those contemplating whether to invest in Roku, it's essential to analyze market trends and available analyst recommendations. While Roku holds a "Hold" rating, other stocks currently gain attention from top analysts as potentially better investment opportunities. It's beneficial to keep an eye on the wider market and emerging sectors, particularly in light of the increasing interest in technology and innovation.

Roku, Stock, Earnings