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

Zacks Equity Research

Roku (ROKU) closed at $128.76 in the latest trading session, marking a -0.23% move from the prior day. This move lagged the S&P 500's daily gain of 0.29%. Elsewhere, the Dow gained 0.17%, while the tech-heavy Nasdaq added 0.19%.

Prior to today's trading, shares of the video streaming company had gained 24.66% over the past month. This has outpaced the Consumer Discretionary sector's loss of 0.19% and the S&P 500's gain of 0.32% in that time.

ROKU will be looking to display strength as it nears its next earnings release, which is expected to be November 6, 2019. The company is expected to report EPS of -$0.28, down 211.11% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $258.07 million, up 48.84% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of -$0.50 per share and revenue of $1.08 billion. These totals would mark changes of -525% and +45.76%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for ROKU. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ROKU is holding a Zacks Rank of #1 (Strong Buy) right now.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 183, which puts it in the bottom 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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