Roku (NASDAQ:ROKU) Stock Price Up 6.4% - Time to Buy?

Roku, Inc. (NASDAQ:ROKU) saw its shares rise by 6.4% during trading on Thursday. The stock reached a high of $84.92 before closing at $83.00. In total, 5,495,623 shares changed hands, which is a 70% increase compared to the average trading volume of 3,238,221 shares. The previous closing price was $77.99.

Wall Street Analyst Insights

Numerous research firms have provided their opinions on Roku. Loop Capital raised their price target from $70.00 to $80.00, maintaining a "hold" rating in a report dated December 9th. Robert W. Baird upgraded Roku's rating from "neutral" to "outperform," increasing their price target from $70.00 to $90.00 in a report on November 18th. Similarly, UBS Group initiated coverage on Roku with a "neutral" rating and a target of $73.00. Macquarie reiterated an "outperform" rating with a price target of $90.00 in a note on October 31st. Meanwhile, Benchmark maintained a "buy" rating, setting a target price of $105.00 in a report dated September 12th. Overall, two analysts issued a sell rating, nine recommended a hold, twelve rated it a buy, and one rated it as a strong buy. According to MarketBeat.com, the consensus rating for Roku is currently "Moderate Buy" with an average target price of $83.81.

Roku's Price Performance

Roku has a 50-day moving average of $75.61 and a 200-day moving average of $69.80, and its market capitalization stands at $12.05 billion. The company has a PE ratio of -69.17 and a beta of 2.05. Recently, Roku reported its earnings for the quarter ending October 30. The company reported a loss of $0.06 per share, surpassing the consensus estimate of a loss of $0.35 by $0.29. Roku also posted revenue of $1.06 billion, exceeding analyst expectations of $1.02 billion. Although the company had a negative return on equity of 7.22% and a net margin of -4.42%, its revenue grew by 16.5% compared to the same period last year. Last year, Roku reported a loss of $2.33 per share. Analysts project that the firm will have an EPS of -1.1 for the current fiscal year.

Insider Trading Activity

In related news, CFO Dan Jedda sold 1,000 shares of Roku's stock on December 16 at an average price of $82.73, totaling $82,730. Following this sale, he holds 64,555 shares valued at approximately $5,340,635.15. This action represents a decrease of 1.53% in his stock ownership. Additionally, CEO Anthony J. Wood sold 25,000 shares on December 10, at an average price of $82.64 for about $2,066,000. Following this transaction, he owns around 26,538 shares worth about $2,193,100.32, marking a 48.51% reduction in his position. The details of these transactions were filed with the SEC. Over the last three months, corporate insiders have sold 48,095 shares totaling $3,731,038, and corporate insiders own approximately 13.98% of Roku's stock.

Institutional Investment Dynamics

Recently, various hedge funds have adjusted their stakes in Roku. FMR LLC increased its investment by 1.7%, owning 14,570,372 shares valued at $1,087,824,000 after adding 244,793 shares. Holocene Advisors LP initiated a new position worth about $129,015,000 in Roku during the third quarter. Westfield Capital Management Co. LP grew its stake by 126.1%, now holding 1,535,576 shares valued at $114,646,000, after purchasing an additional 856,401 shares. Charles Schwab Investment Management Inc. increased its holdings by 3.2%, owning 955,969 shares worth $71,373,000 with an additional 30,038 shares bought last quarter. Point72 Asset Management L.P. significantly raised its position by 352.5%, now owning 651,658 shares valued at $48,653,000 after an additional 507,643 shares were acquired. Cumulatively, institutional investors and hedge funds own 86.30% of Roku's shares.

Roku Company Overview

Roku, Inc., along with its subsidiaries, operates a streaming platform for TV content both in the United States and around the world. The company has two segments: Platform and Devices. Through its streaming platform, users can discover and access various types of content such as TV shows, movies, news, and sports. The Platform segment focuses on digital advertising (including both direct and programmatic video ads), media and entertainment promotional expenses, and other related services. It also includes streaming service distribution featuring subscription and transaction revenue shares, as well as the sale of premium subscriptions and branded buttons on remote controls.

Final Analysis

As Roku continues to experience fluctuations in stock price, potential investors may wonder if now is the right time to buy. Despite the stock's recent uptick, analysts suggest that there are alternative investment options. Current ratings reflect a "Moderate Buy," yet some analysts are marketing stocks as potentially better investments.

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