Roku (ROKU) Gains But Lags Market: What You Should Know

Zacks Equity Research
·2 min read

In the latest trading session, Roku (ROKU) closed at $217.93, marking a +0.24% move from the previous day. This move lagged the S&P 500's daily gain of 1.2%. Elsewhere, the Dow gained 0.53%, while the tech-heavy Nasdaq added 1.64%.

Prior to today's trading, shares of the video streaming company had gained 15.15% over the past month. This has outpaced the Consumer Discretionary sector's loss of 3.8% and the S&P 500's loss of 2.23% in that time.

Investors will be hoping for strength from ROKU as it approaches its next earnings release, which is expected to be November 5, 2020. In that report, analysts expect ROKU to post earnings of -$0.41 per share. This would mark a year-over-year decline of 86.36%. Meanwhile, our latest consensus estimate is calling for revenue of $370.68 million, up 42.06% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of -$1.44 per share and revenue of $1.59 billion. These totals would mark changes of -176.92% and +41.16%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for ROKU. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.61% higher. ROKU currently has a Zacks Rank of #3 (Hold).

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 100, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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