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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 $128.65, marking a +0.2% move from the previous day. The stock lagged the S&P 500's daily gain of 0.45%. At the same time, the Dow added 0.36%, and the tech-heavy Nasdaq gained 0.52%.

Prior to today's trading, shares of the video streaming company had gained 23.5% over the past month. This has outpaced the Consumer Discretionary sector's gain of 0.88% and the S&P 500's gain of 2.08% in that time.

ROKU will be looking to display strength as it nears its next earnings release. On that day, ROKU is projected to report earnings of -$0.53 per share, which would represent a year-over-year decline of 562.5%. Our most recent consensus estimate is calling for quarterly revenue of $304.36 million, up 21.69% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of -$1.72 per share and revenue of $1.51 billion. These totals would mark changes of -230.77% and +33.34%, respectively, from last year.

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Any recent changes to analyst estimates for ROKU should also be noted by investors. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.41% higher. ROKU is currently a Zacks Rank #3 (Hold).

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 74, which puts it in the top 30% 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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Zacks Investment Research