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Roku (ROKU) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, Roku (ROKU) closed at $128.88, marking a -0.56% move from the previous day. This move lagged the S&P 500's daily loss of 0.09%. Elsewhere, the Dow gained 0.04%, while the tech-heavy Nasdaq added 0.06%.

Prior to today's trading, shares of the video streaming company had lost 3.2% over the past month. This has lagged the Consumer Discretionary sector's loss of 2.04% and the S&P 500's gain of 1.26% in that time.

Investors will be hoping for strength from ROKU as it approaches its next earnings release, which is expected to be February 13, 2020. In that report, analysts expect ROKU to post earnings of -$0.14 per share. This would mark a year-over-year decline of 380%. Meanwhile, our latest consensus estimate is calling for revenue of $392.43 million, up 42.32% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for ROKU. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Within the past 30 days, our consensus EPS projection remained stagnant. ROKU is currently sporting 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 62, which puts it in the top 25% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ROKU in the coming trading sessions, be sure to utilize Zacks.com.


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