Roku Inc. (NASDAQ: ROKU) stock fell -3.72% on Tuesday to $52.61 against a previous-day closing price of $54.64. With 4.76 million shares changed hands, the volume of the stock remained lighter than its average volume of 7.64 million shares. During the session, the Entertainment company that operates in wider Communication Services sector, reached to the highest price of $54.79 whereas the lowest price it dropped to was $52.48. The 52-week range on ROKU shows that it touched its highest point at $177.96 and its lowest point at $38.26 during that stretch. It currently has a 1-year price target of $57.70. Beta for the stock currently stands at 1.71.
Price Performance and Earnings:
Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ROKU was up-trending over the past week, with a rise of 3.10%, but this was up by 22.49% over a month. Three-month performance surged to 4.91% while six-month performance fell -39.33%. The stock lost -65.42% in the past year, while it has gained 29.26% so far this year. A look at the trailing 12-month EPS for ROKU yields -1.73 with Next year EPS estimates of -4.10. For the next quarter, that number is -1.72. This implies an EPS growth rate of -312.30% for this year and -12.90% for next year. EPS is expected to grow by 43.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 42.10%.
Float and Shares Shorts:
At present, 138.57 million ROKU shares are outstanding with a float of 121.47 million shares on hand for trading. On Oct 13, 2022, short shares totaled 10.64 million, which was 7.71% higher than short shares on Sep 14, 2022. In addition to Mr. Anthony J. Wood as the firm’s Founder, Chairman, Pres & CEO, Mr. Steven P. Louden serves as its Chief Financial Officer.
Through their ownership of 77.11% of ROKU’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 41.31% of ROKU, in contrast to 39.01% held by mutual funds. Shares owned by individuals account for 3.51%. As the largest shareholder in ROKU with 10.20% of the stake, ARK Investment Management LLC holds 12,423,747 shares worth 12,423,747. A second-largest stockholder of ROKU, The Vanguard Group, Inc., holds 10,648,519 shares, controlling over 8.74% of the firm’s shares. Nikko Asset Management Co., Ltd. is the third largest shareholder in ROKU, holding 7,403,422 shares or 6.08% stake. With a 7.49% stake in ROKU, the ARK Innovation ETF is the largest stakeholder. A total of 9,130,741 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 3.05% of ROKU stock, is the second-largest Mutual Fund holder. It holds 3,710,537 shares valued at 151.02 million. Nikko AM Global Umbrella Fund – A holds 2.39% of the stake in ROKU, owning 2,917,393 shares worth 118.74 million.
Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ROKU since 31 analysts follow the stock currently. There are 11 analysts who recommend BUY ratings, while 5 suggest SELL ratings. Of the remaining analysts, 12 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 2 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ROKU analysts setting a high price target of $80.00 and a low target of $30.00, the average target price over the next 12 months is $55.85. Based on these targets, ROKU could surge 52.06% to reach the target high and fall by -42.98% to reach the target low. Reaching the average price target will result in a growth of 6.16% from current levels.
EPS: Estimates vs Actual
It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ROKU will report FY 2022 earnings on 02/16/2024. Analysts have provided yearly estimates in a range of -$3.33 being high and -$3.94 being low. For ROKU, this leads to a yearly average estimate of -$3.62. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Roku Inc. surprised analysts by $0.41 when it reported -$0.88 EPS against a consensus estimate of -$1.29. The surprise factor in the prior quarter was -$0.11. Based on analyst estimates, the high estimate for the next quarter is -$1.43 and the low estimate is -$1.96. The average estimate for the next quarter is thus -$1.71.
Summary of Insider Activity:
Insiders traded ROKU stock several times over the past three months with 4 Buys and 5 Sells. In these transactions, 39,159 shares were bought while 22,789 shares were sold. The number of buy transactions has increased to 34 while that of sell transactions has risen to 54 over the past year. The total number of shares bought during that period was 854,392 while 699,723 shares were sold.