Roku (NASDAQ:ROKU) Shares Down 2.1% After Analyst Downgrade

Roku, Inc. (NASDAQ:ROKU)’s share price traded down 2.1% during mid-day trading on Tuesday after Wedbush downgraded the stock from an outperform rating to a neutral rating. Wedbush now has a $155.00 price target on the stock. Roku traded as low as $137.92 and last traded at $137.95. 15,200,513 shares changed hands during mid-day trading, an increase of 343% from the average session volume of 3,433,969 shares. The stock had previously closed at $140.90.

ROKU has been the topic of a number of other research reports. Guggenheim upped their price target on shares of Roku from $140.00 to $145.00 and gave the stock a “buy” rating in a research note on Tuesday, June 9th. Piper Sandler cut shares of Roku from an “overweight” rating to a “neutral” rating and upped their target price for the company from $148.00 to $160.00 in a research note on Tuesday. Needham & Company LLC upped their target price on shares of Roku from $140.00 to $170.00 and gave the company a “buy” rating in a research note on Monday. KeyCorp cut shares of Roku from an “overweight” rating to a “sector weight” rating in a research note on Monday. Finally, Susquehanna cut shares of Roku from a “positive” rating to a “neutral” rating and set a $160.00 target price on the stock. in a research note on Tuesday. Thirteen research analysts have rated the stock with a Buy rating and fifteen have assigned a Hold rating to the company’s stock. Based on data from MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus price target of $151.56.

Insider Buying and Selling at Roku

In other Roku news, CEO Anthony J. Wood sold 25,000 shares of the stock in a transaction that occurred on Friday, June 12th. The shares were sold at an average price of $130.00, for a total transaction of $3,250,000.00. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Mustafa Ozgen sold 10,194 shares of the stock in a transaction that occurred on Friday, June 12th. The shares were sold at an average price of $144.00, for a total transaction of $1,467,936.00. Following the sale, the insider directly owned 19,185 shares of the company’s stock, valued at approximately $2,762,640. This trade represents a 34.70% 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. Over the last 90 days, insiders sold 706,194 shares of company stock worth $80,756,499. Insiders own 13.45% of the company’s stock.

Roku News Summary

Here are the key news stories impacting Roku this week:

• Positive Sentiment: The Fox deal provides Roku shareholders with a clear acquisition premium and a defined exit value, which supports the stock and has drawn fresh analyst interest with several firms raising price targets toward the deal level. Roku (ROKU) Agrees To Fox Acquisition In A Landmark Streaming Deal
• Positive Sentiment: Analysts at JPMorgan and Rosenblatt lifted targets to $160, signaling that Wall Street sees meaningful value in Roku even after the takeover announcement. Analyst target updates for Roku
• Neutral Sentiment: Several law firms have launched investigations into whether Roku’s board secured a fair price for investors, which could create headlines and possibly complicate sentiment, but does not change the announced deal terms yet. ROKU Alert: Monsey Firm of Wohl & Fruchter Investigating Fairness of the Proposed Sale of Roku to Fox Corporation
• Neutral Sentiment: Some commentary suggests Roku may still have a modest standalone value above the deal price, but the acquisition now dominates the stock’s near-term trading. Roku’s Near-Term Upside Limited by Fox Deal, Wedbush Says
• Negative Sentiment: The takeover limits further upside for Roku as traders increasingly price the stock around the $160 transaction value rather than a higher independent growth multiple. Fox to acquire streaming device maker for $22 billion

Hedge Funds Weigh In On Roku

Several institutional investors have recently made changes to their positions in ROKU. AQR Capital Management LLC increased its stake in shares of Roku by 275.5% during the third quarter. AQR Capital Management LLC now owns 2,586,125 shares of the company’s stock valued at $258,897,000 after buying an additional 1,897,407 shares during the period. Arrowstreet Capital Limited Partnership boosted its holdings in Roku by 229.5% in the first 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 in the last quarter. Fred Alger Management LLC boosted its holdings in Roku by 7,087.7% in the fourth quarter. Fred Alger Management LLC now owns 1,421,440 shares of the company’s stock worth $154,212,000 after acquiring an additional 1,401,664 shares in the last quarter. Holocene Advisors LP lifted its holdings in shares of Roku by 352.3% during the third quarter. Holocene Advisors LP now owns 1,650,448 shares of the company’s stock worth $165,259,000 after purchasing an additional 1,285,585 shares during the period. Finally, Norges Bank acquired a new stake in shares of Roku during the fourth quarter worth about $92,808,000. Hedge funds and other institutional investors own 86.30% of the company’s stock.

Roku Price Performance

The stock has a market cap of $20.34 billion, a price-to-earnings ratio of 103.72 and a beta of 2.06. The stock has a fifty day moving average of $119.60 and a 200 day moving average of $106.65.

Roku (NASDAQ:ROKU) last announced its quarterly earnings results on Thursday, April 30th. The company reported $0.57 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.34 by $0.23. The company had revenue of $1.25 billion during the quarter, compared to the consensus estimate of $1.20 billion. Roku had a return on equity of 7.64% and a net margin of 4.06%.Roku’s revenue for the quarter was up 22.4% on a year-over-year basis. During the same period in the previous year, the company posted ($0.19) earnings per share. As a group, equities analysts expect that Roku, Inc. will post 2.41 earnings per share for the current fiscal year.

About Roku

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.