Roku (NASDAQ:ROKU) Trading Down 1.3% – Should You Sell?

Roku, Inc. (NASDAQ:ROKU)’s share price dropped 1.3% during mid-day trading on Tuesday . The company traded as low as $123.93 and last traded at $124.4420. Approximately 2,819,349 shares were traded during mid-day trading, a decline of 15% from the average daily volume of 3,307,793 shares. The stock had previously closed at $126.02.

Roku News Summary

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Q1 earnings beat — Roku reported stronger-than-expected Q1 revenue and EPS with platform revenue surging and record free cash flow, supporting the company’s ad/subscription monetization thesis. ROKU Shares Rise 6% on Q1 Earnings Beat, Revenues and EPS Up Y/Y
• Positive Sentiment: Content and distribution additions — Roku added 15 new free channels to its platform, which can increase engagement, ad inventory and potential ad revenue. Roku Just Added 15 New Channels — And They’re All Free
• Positive Sentiment: New low-cost subscription (Howdy) — Roku’s Howdy $3/month service is getting coverage as a viable low-price add-on that could drive ARPU and reduce churn if adoption scales. Here’s Why Howdy, Roku’s Low-Cost Streaming Service, Is Worth Your $3/Month
• Positive Sentiment: Structural cost/market tailwind — analysis suggests Roku’s low-memory hardware footprint may benefit it amid rising memory prices, potentially protecting margins vs. peers. How ROKU Stock Could Be One of the Biggest Winners of Sky-High Memory Prices
• Neutral Sentiment: Analyst update — Citigroup raised its price target to $120 but kept a “neutral” rating, signaling mixed analyst sentiment and implying limited near-term upside from that house. Benzinga coverage of analyst update
• Negative Sentiment: Class-action lawsuits alleging updates “bricked” TCL TVs running Roku software — multiple outlets report a new suit accusing Roku (with TCL) of shipping updates that rendered devices unusable; litigation and reputational risk could pressure the stock and lead to legal costs or remedial expenses. TCL and Roku sued for allegedly bricking TVs with updates Roku and TCL are being sued for allegedly bricking smart TVs ROKU and TCL accused of bricking TVs in new class action lawsuit

Wall Street Analysts Forecast Growth

A number of analysts recently commented on the stock. Wedbush lifted their target price on shares of Roku from $140.00 to $155.00 and gave the stock an “outperform” rating in a research note on Friday. Arete Research set a $132.00 target price on shares of Roku and gave the stock a “buy” rating in a research note on Monday, January 5th. Piper Sandler lifted their target price on shares of Roku from $140.00 to $148.00 and gave the stock an “overweight” rating in a research note on Friday. Weiss Ratings upgraded shares of Roku from a “sell (d-)” rating to a “hold (c-)” rating in a research note on Tuesday, February 17th. Finally, Evercore reiterated an “outperform” rating and issued a $150.00 target price on shares of Roku in a research note on Friday, February 13th. Twenty-one research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company’s stock. According to data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus target price of $142.17.

Roku Trading Down 1.3%

The firm has a 50-day simple moving average of $100.40 and a two-hundred day simple moving average of $100.88. The company has a market capitalization of $18.35 billion, a price-to-earnings ratio of 93.57 and a beta of 2.04.

Roku (NASDAQ:ROKU) last announced its quarterly earnings results on Thursday, April 30th. The company reported $0.57 earnings per share for the quarter, topping the consensus estimate of $0.34 by $0.23. The company had revenue of $1.25 billion for the quarter, compared to the consensus estimate of $1.20 billion. Roku had a return on equity of 7.68% and a net margin of 4.06%.The firm’s revenue for the quarter was up 22.4% compared to the same quarter last year. During the same period last year, the firm earned ($0.19) EPS. Equities research analysts anticipate that Roku, Inc. will post 2.24 EPS for the current year.

Insider Activity at Roku

In related news, CEO Anthony J. Wood sold 25,000 shares of the business’s stock in a transaction on Thursday, April 16th. The shares were sold at an average price of $110.19, for a total value of $2,754,750.00. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Dan Jedda sold 7,000 shares of the business’s stock in a transaction on Wednesday, April 15th. The shares were sold at an average price of $107.00, for a total transaction of $749,000.00. Following the completion of the transaction, the chief financial officer owned 78,115 shares of the company’s stock, valued at approximately $8,358,305. This represents a 8.22% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 630,182 shares of company stock worth $66,865,773 in the last three months. Company insiders own 13.98% of the company’s stock.

Hedge Funds Weigh In On Roku

Several large investors have recently made changes to their positions in the company. Raleigh Capital Management Inc. lifted its stake in shares of Roku by 6.5% in the 1st quarter. Raleigh Capital Management Inc. now owns 1,522 shares of the company’s stock valued at $144,000 after purchasing an additional 93 shares during the period. Apollon Wealth Management LLC lifted its stake in shares of Roku by 1.5% in the 4th quarter. Apollon Wealth Management LLC now owns 6,450 shares of the company’s stock valued at $700,000 after purchasing an additional 96 shares during the period. Cornerstone Wealth Management LLC lifted its stake in shares of Roku by 3.8% in the 3rd quarter. Cornerstone Wealth Management LLC now owns 2,728 shares of the company’s stock valued at $273,000 after purchasing an additional 100 shares during the period. Thoroughbred Financial Services LLC lifted its stake in shares of Roku by 1.0% in the 3rd quarter. Thoroughbred Financial Services LLC now owns 9,945 shares of the company’s stock valued at $995,000 after purchasing an additional 100 shares during the period. Finally, Quantum Portfolio Management LLC lifted its stake in shares of Roku by 2.6% in the 1st quarter. Quantum Portfolio Management LLC now owns 4,135 shares of the company’s stock valued at $391,000 after purchasing an additional 105 shares during the period. 86.30% of the stock is currently owned by institutional investors and hedge funds.

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.