Roku (ROKU) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
·2-min read

In the latest trading session, Roku (ROKU) closed at $222.36, marking a -0.19% move from the previous day. This change lagged the S&P 500's 0.52% gain on the day. At the same time, the Dow added 0.54%, and the tech-heavy Nasdaq gained 0.19%.

Prior to today's trading, shares of the video streaming company had gained 18.98% over the past month. This has outpaced the Consumer Discretionary sector's gain of 2.37% and the S&P 500's gain of 4.79% in that time.

ROKU will be looking to display strength as it nears its next earnings release, which is expected to be November 5, 2020. The company is expected to report EPS of -$0.41, down 86.36% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $370.68 million, up 42.06% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of -$1.44 per share and revenue of $1.59 billion, which would represent changes of -176.92% and +41.16%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for ROKU. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.61% higher within the past month. ROKU currently has a Zacks Rank of #3 (Hold).

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 166, which puts it in the bottom 35% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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