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Strength Seen in Roku (ROKU): Can Its 8.0% Jump Turn into More Strength?

Roku ROKU shares rallied 8% in the last trading session to close at $68.03. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 13.6% gain over the past four weeks.

Roku is benefitng from increased user engagement on The Roku Channel and continued popularity of the Roku TV program. The recent upswing can also be attributed to news that Amazon is planning to add ad-tier in its Prime service.

This video streaming company is expected to post quarterly loss of $1.28 per share in its upcoming report, which represents a year-over-year change of -56.1%. Revenues are expected to be $769.61 million, up 0.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

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For Roku, the consensus EPS estimate for the quarter has been revised 1.1% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on ROKU going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Roku is a member of the Zacks Broadcast Radio and Television industry. One other stock in the same industry, Netflix (NFLX), finished the last trading session 0.1% higher at $399.77. NFLX has returned 20.2% over the past month.

For Netflix , the consensus EPS estimate for the upcoming report has changed -0.6% over the past month to $2.79. This represents a change of -12.8% from what the company reported a year ago. Netflix currently has a Zacks Rank of #3 (Hold).

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Roku, Inc. (ROKU) : Free Stock Analysis Report

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