Roku (NASDAQ:ROKU) Shares Rise 6.4% - Is Now the Right Time to Buy?

Roku, Inc. (NASDAQ:ROKU) experienced a notable increase in its share price, gaining 6.4% during trading on Thursday. The stock reached a high of $84.92 before settling at $83.00. A total of 5,495,623 shares changed hands, marking a significant rise of 70% compared to the average trading volume of 3,238,221 shares. Previously, the stock had closed at $77.99.

Insights from Wall Street Analysts

• The Potential of Roku and The Trade Desk in Adtech

Several research analysts have provided their insights regarding Roku. Loop Capital raised their price target for the stock from $70.00 to $80.00 while maintaining a "hold" rating in a note issued on December 9. Additionally, Robert W. Baird upgraded Roku from a "neutral" to an "outperform" rating, increasing their price target from $70.00 to $90.00 in a note dated November 18. On November 22, UBS Group initiated coverage on Roku with a "neutral" rating and set a price target of $73.00. Macquarie reaffirmed an "outperform" rating and established a target price of $90.00 for Roku shares in a note released on October 31. Benchmark reiterated a "buy" rating with a more ambitious target of $105.00 on September 12. Currently, among analysts, two have provided a sell rating, nine have rated the stock a hold, twelve a buy, and one a strong buy. According to MarketBeat.com, the consensus rating for Roku is classified as a "Moderate Buy" with an average target price of $83.81.

Get Our Latest Stock Analysis on Roku

Roku's Stock Performance Overview

• Prospects for Roku's Future Health: Anticipating 2025

The company has recorded a 50-day simple moving average of $75.61 and a 200-day simple moving average of $69.80. Roku's market capitalization stands at $12.05 billion, with a negative PE ratio of -69.17 and a beta value of 2.05. The last earnings report for Roku was released on October 30. In that quarter, Roku reported earnings per share of ($0.06), surpassing expectations that had estimated ($0.35) by a margin of $0.29. The company posted revenue of $1.06 billion during the quarter, exceeding the consensus estimate of $1.02 billion. Although Roku has shown a negative return on equity of 7.22% and a net margin of -4.42%, the company's revenue grew by 16.5% year-over-year when compared to the same period last year, where earnings per share were ($2.33). Analysts project that Roku, Inc. might report an EPS of -1.1 for the current fiscal year.

Insider Trading Activity

• The Trade Desk: Navigating Market Sentiment

In recent insider trading activities, CFO Dan Jedda disposed of 1,000 shares of Roku on December 16, selling them at an average price of $82.73 for an aggregate value of $82,730.00. Consequently, he now holds 64,555 shares of Roku, worth approximately $5,340,635.15. This sale results in a decrease of 1.53% in his shareholding. CEO Anthony J. Wood also sold 25,000 shares on December 10 at an average price of $82.64, totaling around $2,066,000.00. He currently possesses 26,538 shares valued at roughly $2,193,100.32, marking a significant reduction of 48.51% in his holdings. Over the past three months, insiders have sold 48,095 shares valued at $3,731,038. Currently, corporate insiders collectively own 13.98% of the company's stock.

Institutional Investors' Activity

Recent movements among hedge funds have shown varying interests in Roku shares. FMR LLC increased its stake by 1.7% in the third quarter, now holding 14,570,372 shares valued at $1,087,824,000 after acquiring an additional 244,793 shares. Holocene Advisors LP initiated a new position in Roku during the same quarter, valued at around $129,015,000. Westfield Capital Management Co. LP boosted its stake significantly by 126.1% during the third quarter, now owning 1,535,576 shares valued at $114,646,000 after purchasing an additional 856,401 shares. Charles Schwab Investment Management Inc. augmented its position by 3.2%, holding 955,969 shares worth $71,373,000 following a recent purchase of 30,038 shares. Finally, Point72 Asset Management L.P. increased its stake by an impressive 352.5%, now owning 651,658 shares valued at $48,653,000 after acquiring an extra 507,643 shares in the same timeframe. Overall, institutional investors and hedge funds control 86.30% of Roku's stock.

About Roku, Inc.

Roku, Inc., along with its subsidiaries, operates a streaming platform for television both in the United States and internationally. The company is divided into two segments: Platform and Devices. Its streaming platform enables users to locate and access various forms of entertainment, including TV shows, movies, news, and sports. The Platform segment focuses on digital advertising, comprising both direct and programmatic video ads, media advertising, and revenue shares from streaming services alongside premium subscriptions.

Considerations Before Investing in Roku

Before deciding on Roku as an investment, it is advisable to consider various factors. Although Roku maintains a "Moderate Buy" rating, several top analysts have identified alternative stocks they recommend as better investment opportunities.

Roku, Stocks, Investment