Roku (NASDAQ:ROKU) Stock Falls 1.5% – Here’s Why

Roku, Inc. (NASDAQ:ROKU) shares traded down 1.5% during trading on Thursday. The company traded as low as $160.12 and last traded at $160.37. 5,107,305 shares changed hands during trading, an increase of 56% from the average daily volume of 3,282,624 shares. The stock had previously closed at $162.77.

Key Stories Impacting Roku

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Roku recently reached a new 52-week high. A Zacks report also identifies ROKU as a long-term momentum stock, reinforcing the positive trend narrative. Zacks momentum report
• Positive Sentiment: Technical coverage points to a “golden cross” signal after shares moved above the 20-day moving average, which may encourage short-term bullish trading. Zacks technical analysis
• Positive Sentiment: Recent results provide fundamental support for the rally: Roku reported quarterly revenue of $1.50 billion, up 24.1% year over year and above estimates, while EPS of $1.20 topped the $0.55 consensus. Roku earnings and advertising coverage
• Neutral Sentiment: Director Neil Hunt and Chief Accounting Officer Matthew Banks sold shares under pre-arranged Rule 10b5-1 plans. The scheduled nature of the sales makes them a limited signal of insiders’ current views. Director sale filing
• Negative Sentiment: The reported analyst consensus price target is $156.17, below the recent share price near $160, suggesting analysts see limited upside at current levels; the consensus rating is Hold. Analyst price target report
• Negative Sentiment: Roku’s decision to retire its popular Aquatic Life screensaver has prompted consumer complaints. This appears to be a modest product/reputation concern rather than a major near-term financial driver. Screensaver coverage

Analysts Set New Price Targets

A number of research firms recently weighed in on ROKU. Fox Advisors set a $157.00 target price on Roku in a research report on Friday, July 17th. BMO Capital Markets raised Roku from a “market perform” rating to an “outperform” rating in a report on Tuesday. Needham & Company LLC reiterated a “buy” rating on shares of Roku in a research report on Tuesday. JPMorgan Chase & Co. started coverage on Roku in a report on Monday, August 24th. They set a “neutral” rating and a $160.00 price objective on the stock. Finally, Wedbush restated a “neutral” rating and set a $155.00 price objective on shares of Roku in a research report on Thursday, September 24th. One investment analyst has rated the stock with a Strong Buy rating, eight have issued a Buy rating and eighteen have issued a Hold rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of “Hold” and an average target price of $156.17.

Roku Trading Down 1.5%

The business’s fifty day moving average price is $155.21 and its 200 day moving average price is $128.34. The company has a market capitalization of $23.80 billion, a P/E ratio of 47.45 and a beta of 2.12.

Roku (NASDAQ:ROKU) last posted its earnings results on Monday, November 2nd. The company reported $1.20 earnings per share for the quarter, beating analysts’ consensus estimates of $0.55 by $0.65. Roku had a net margin of 9.34% and a return on equity of 18.65%. The business had revenue of $1.50 billion for the quarter, compared to analysts’ expectations of $1.41 billion. During the same quarter in the previous year, the firm posted $0.16 earnings per share. The firm’s revenue for the quarter was up 24.1% on a year-over-year basis. Equities research analysts anticipate that Roku, Inc. will post 2.97 EPS for the current year.

Insider Buying and Selling

In related news, insider Charles Collier sold 20,538 shares of the stock in a transaction dated Monday, October 5th. The shares were sold at an average price of $151.63, for a total transaction of $3,114,176.94. Following the completion of the sale, the insider owned 22,700 shares in the company, valued at $3,442,001. This trade represents a 47.50% decrease in their position. 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, CAO Matthew C. Banks sold 552 shares of Roku stock in a transaction dated Monday, November 2nd. The shares were sold at an average price of $157.44, for a total transaction of $86,906.88. Following the transaction, the chief accounting officer directly owned 7,016 shares of the company’s stock, valued at $1,104,599.04. This represents a 7.29% 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 the last 90 days, insiders sold 88,028 shares of company stock worth $13,645,922. Insiders own 13.45% of the company’s stock.

Institutional Trading of Roku

Several hedge funds have recently modified their holdings of the company. Arrowstreet Capital Limited Partnership grew its position in Roku by 229.5% during the 1st quarter. Arrowstreet Capital Limited Partnership now owns 2,038,347 shares of the company’s stock worth $192,868,000 after acquiring an additional 1,419,772 shares during the last quarter. HBK Investments L P bought a new position in Roku in the 2nd quarter valued at $163,604,000. Renaissance Technologies LLC boosted its stake in Roku by 22.8% in the first quarter. Renaissance Technologies LLC now owns 1,565,100 shares of the company’s stock worth $148,090,000 after purchasing an additional 290,200 shares in the last quarter. Bank of New York Mellon Corp acquired a new position in Roku in the second quarter worth $105,216,000. Finally, Bank of America Corp DE boosted its stake in Roku by 5.5% in the first quarter. Bank of America Corp DE now owns 1,082,755 shares of the company’s stock worth $102,450,000 after purchasing an additional 56,893 shares in the last quarter. Institutional investors and hedge funds own 86.30% of the company’s stock.

About Roku

Roku, Inc (NASDAQ: ROKU) operates a television streaming platform that connects consumers with digital entertainment. The company develops and licenses Roku OS, an operating system for smart televisions and streaming devices, and offers Roku-branded streaming players, Roku TVs, audio products and related accessories.

Roku also operates a platform business that distributes streaming content through its interface and supports content discovery, subscriptions and digital advertising. Its services include The Roku Channel, which provides a selection of ad-supported and premium entertainment, as well as tools that enable content providers and advertisers to reach streaming audiences.

Founded in 2002 by Anthony Wood, Roku initially became known for its streaming players and later expanded through partnerships with television manufacturers.