UBS Group has recently initiated coverage on Roku, Inc. (NASDAQ: ROKU), assigning a "neutral" rating along with a price target of $73.00 per share. This target indicates a potential upside of approximately 5.90% from Roku's current trading price.
Other financial institutions have also weighed in on Roku's stock. Bank of America has raised its target price from $75.00 to $90.00, categorizing the stock as a "buy." Wolfe Research has similarly upgraded Roku from a "peer perform" to an "outperform" rating, setting a target price of $93.00. Guggenheim has also shifted its stance, moving from a "neutral" to a "buy" rating with a target of $75.00. Meanwhile, Wells Fargo has adjusted its target price from $72.00 to $74.00, maintaining an "equal weight" rating. The consensus among analysts reflects a "Moderate Buy" rating, with an average target price of $84.14.
Roku's latest earnings report, released on October 30, revealed a loss of $0.06 per share, which surpassed analysts' expectations of a loss of $0.35. The company reported revenue of $1.06 billion for the quarter, exceeding the anticipated $1.02 billion and marking a 16.5% increase year-over-year. Despite these positive indicators, Roku continues to grapple with a negative net margin of 4.42% and a return on equity of -7.22%. Analysts predict that Roku will post an earnings per share of -1.1 for the current fiscal year.
In addition to its earnings performance, insider trading activity has been notable. Chief Accounting Officer Matthew C. Banks sold 8,693 shares at an average price of $71.44, resulting in a total transaction value of approximately $621,028. Following this sale, Banks now holds 7,264 shares, reflecting a significant decrease in ownership. Similarly, CFO Dan Jedda sold 1,000 shares at an average price of $75.00, totaling $75,000. Over the past 90 days, insiders have sold a total of 90,240 shares valued at $6.73 million, indicating a trend of insider selling that may raise questions among investors.
Roku's stock has attracted significant attention from institutional investors and hedge funds, with many adjusting their positions in the company. FMR LLC increased its stake by 1.7% in the third quarter, now holding over 14.57 million shares valued at approximately $1.09 billion. ARK Investment Management also raised its position by 1.3%, owning around 12.72 million shares worth $762 million. Other notable movements include Holocene Advisors LP, which acquired a new stake valued at $129 million, and Westfield Capital Management, which boosted its holdings by 126.1%, now owning over 1.53 million shares. The institutional ownership of Roku stands at a substantial 86.30%, reflecting strong confidence from large investors.
As of the latest trading session, Roku's stock opened at $68.93, with a market capitalization of approximately $10.01 billion. The company has experienced a price-to-earnings ratio of -57.45, indicating that it is currently operating at a loss. The stock has seen a 52-week low of $48.33 and a high of $108.84, showcasing significant volatility in its price movements over the past year. The fifty-day moving average stands at $74.66, while the two-hundred-day moving average is at $64.97, suggesting that the stock has been trading below its recent averages.
Analysts are closely monitoring Roku's performance, particularly in light of its earnings results and the broader market trends affecting technology and streaming services. The company's ability to navigate these challenges while maintaining growth will be crucial for its stock performance in the coming months. As the streaming landscape continues to evolve, Roku's strategic decisions and market positioning will play a pivotal role in determining its future trajectory.