134.24 -0.02 (-0.01%)
After hours: 7:28PM EDT
|Bid||134.05 x 1000|
|Ask||134.24 x 1300|
|Day's Range||133.15 - 137.96|
|52 Week Range||26.30 - 142.10|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Earnings Date||Nov 5, 2019 - Nov 11, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||117.53|
Aug.12 -- Mark Mahaney, RBC Capital Markets analysts, discusses the outlook for Roku Inc. with Bloomberg's Taylor Riggs on "Bloomberg Technology."
Parents and children will have an easier time consuming family-friendly content on their Roku devices with the addition of “Kids & Family” aggregation on The Roku Channel.
[CORRECTION: This version corrects that Roku's 52-week high is $142.10 and not $198.23.]In general, equity markets represent investor confidence. Since late July, most tech stocks have been declining amidst the bearish sentiment in the global and United States markets. It is no secret that the Chinese economy is beginning to feel the effects of the ongoing trade war. Other global powers, such as Japan, the United Kingdom and the European Union, led by Germany and France, are also showing signs of a slowdown. And earlier in the week, Argentina spooked the Latin American markets when its currency and equity markets lost a third of their value overnight.In other words, unless we have a swift resolution on the trade war front, spending by the U.S. consumer may not be enough to improve economic prospects globally.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTherefore, investors are wondering what may be next for many of the tech stocks in their portfolios. Today, I'd like to discuss three tech stocks to avoid in the second half of August and possibly in September, too. These stocks are Baidu (NASDAQ:BIDU), Roku (NASDAQ:ROKU) and Tesla (NASDAQ:TSLA). * 10 Cyclical Stocks to Buy (or Sell) Now Investors may consider waiting on the sidelines if they do not currently have any positions open in these tech stocks. If they already own shares, they may either consider taking some money off the table during this market bounce or hedging their positions. As for hedging strategies, covered calls or put spreads with Sep 20 expiry could be appropriate as straight put purchases are likely to be expensive due to heightened volatility.With all of that in mind, let's dive a little deeper into each of these stocks. Stocks to Sell: Baidu (BIDU)Source: testing / Shutterstock.com Notable Risks: Valuation, questions about growth, trade wars and broader tech market weaknessPossible Price Range: $85-$105During the past year, the BIDU stock price is down 55%. On Sep. 21, 2018, the shares saw a 52-week high of $234.88. Now, Baidu stock is hovering around $95. Clearly, the bears have taken control of the tape.What is the main reason for the deterioration of Baidu's market cap? Investors fear that the company's growth narrative does not hold any more.BIDU has two sources of revenue: * Internet advertising business (which is at the core); and * Income from majority ownership in iQiyi (NASDAQ:IQ)The tech market in China has grown exponentially in the last decade. And Baidu stock has been able to ride that wave. Baidu has over 70% of the Chinese online search market share. Until about a year ago, this leadership has meant growing advertising revenues and solid margins.However, that is not the case anymore. Competitors like Alibaba (NYSE:BABA) and Tencent (OTCMKTS:TCEHY) have been pressuring its business model and ad revenues. Many Chinese consumers are using apps that bypass browsers and thus Baidu's search engine. In other words, BIDU stock's desktop search business is being disrupted or even displaced.Wall Street is not sure if management knows how to go after the challenge to Baidu's core business. The company has increased spending to attract more advertisers, which in turn has affected margins. In other words, the company spends a lot of cash to make some money.Furthermore, as the Chinese economy slows down, all these companies chase the same advertisers, who have been scaling down ad budgets.The second factor adversely affecting Baidu's top-line growth comes from its ownership of iQiyi, the so-called Netflix (NASDAQ:NFLX) of China. Baidu still owns roughly two-thirds of iQiyi, so IQ's results and its growth are reflected in Baidu's consolidated numbers. And iQiyi stock is not making any money at this point either.Management at iQiyi has underlined that as the company further invests in technology and builds content, the cost of revenue would be high -- therefore the company will not be profitable any time soon.And when you add the uncertainty around trade wars, it may just not be fashionable to buy BIDU shares in 2019. Overall, the bull thesis supporting BIDU stock is falling apart. It would be important to analyze the next earnings report expected in November to see if Baidu stock has a better investment proposition for long-term investors.From a time and price analysis perspective, I'd expect BIDU stock to reach a 52-week low around Sept. 21. Until then, I'd not get too bullish on Baidu shares. Roku (ROKU)Source: JHVEPhoto / Shutterstock.com Notable Risks: Profit-taking, rich valuation and broader tech market weaknessPossible Price Range: $135-$155ROKU stock has been on a tear this year. Year-to-date, Roku shares are up 135%. However, it might now be time for investors to become cautious.With a market cap of $11.7 billion, Roku stock is the largest over-the-top streaming content provider in the U.S. On Aug. 13, 2019, ROKU stock hit a 52-week high at $142.10.U.S. consumers are fast moving from traditional pay-TV services to streaming delivery services. Advertisers are following those viewers. That's reason number one why, longer-term, I would not bet against Roku shares whose revenue increasingly comes from advertising. However, there is likely to be some further profit-taking in ROKU stock in the next few weeks.Roku has been a pioneer in streaming video gadgets. The company's revenue can be divided into two segments: "Player" which represents sales of its digital media boxes and "Platform" which includes advertising sales, licensing and other non-hardware revenue sources.At present, Roku and Hulu, the video streaming service that is majority-owned by Disney (NYSE:DIS), are the market leaders in over-the-top advertising. OTT ads are shown on a TV screen through a smart TV or streaming device.Roku is a growth stock, but it's also a speculative one. Long-term ROKU bulls happily highlight many of Roku's competitive advantages, starting with the platform's first-mover advantage in OTT advertising, share of smart TVs sold in the U.S. and projected annual growth of over 30% in the rapidly expanding over-the-top streaming market.On the other side of the coin are the nervous investors and short-sellers who are looking for any excuse to short ROKU stock. If Roku cannot keep up with the aggressive growth assumptions, then shareholders may become more concerned with low profits as well as its margins and the stock price could easily suffer. In other words, could ROKU stock price be getting ahead of itself? * 8 Dividend Aristocrat Stocks to Buy Now No Matter What Therefore, I'd encourage retail investors to exercise caution with Roku stock until the next earnings report, expected in October. Tesla (TSLA)Source: Sheila Fitzgerald / Shutterstock.com Notable Risks: Fundamentals, profit-taking, trade wars and broader tech market weaknessPossible Price Range: $180-$230When Tesla released worse-than-expected second-quarter 2019 earnings on July 24, many investors possibly ended up with more questions than answers on what to expect from Tesla stock for the rest of the year.Before reporting earnings, TSLA stock closed at $264.88. The next morning it opened at $234.50. Now Tesla stock price is hovering around the $220-$225 range.Investors usually can get a sense of any current and future problems by looking at operational and market performance as well as at basic financial metrics and cash flow. In Tesla's case, we may have a combination of signs of difficulty.The past year has seen the demand for electric vehicles decline in the U.S. And Tesla's Model 3 sales have not been at the levels expected.Tesla's Q2 results showed that the gross margin of its automotive segment is declining. Last quarter, it was 20.2%. In Q4 and Q3 of 2018, the metric was 24.3% and 25.8%, respectively.The main reason behind the decline of the company's gross margin is that Tesla's sales mix is increasingly shifting from higher-priced S and X models to the Model 3. Model 3, which is priced at $35,000 is an entry-level car that carries lower margins.As we discuss Tesla's problems, we have to mention that the auto sector is susceptible to the trade-war risk. As the demand in the U.S. declines, Tesla needs to achieve increased sales numbers from overseas, namely China, the largest electric vehicle market in the world.In late 2017, Tesla and the Chinese government agreed that the company would manufacture cars in China, and build and own a factory in Shanghai.TSLA is continuing to build its manufacturing plant in Shanghai. However, the details as to when actual production will begin at the plant is sketchy. Tesla is yet to release definite dates and production goals for the plant.At this point, TSLA stock has had several months of poor performance, both in terms of metrics and the stock price. Therefore, before committing any capital into the shares, I'd like to see the next earnings statement, expected in late October. By then, we might even have an earnings warning statement, which would send the stock even further south.At this point, Tesla bears have the upper hand and I'd consider investing in TSLA stock as a speculative bet.As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 3 Tech Stocks to Avoid (or Sell) for Now appeared first on InvestorPlace.
Roku, Inc. (ROKU) today announced the addition of “Kids & Family” on The Roku Channel, the home for free and premium entertainment on the Roku platform. The new Kids & Family experience makes it easy for children and parents to find a great selection of tailored content available for free and through Premium Subscriptions available in one, easy-to-access destination. In addition, Roku is rolling out Parental Control features for The Roku Channel giving parents an additional layer of control over what their kids can playback within the channel.
When it comes to growth stocks in general and the growth stocks of newer or smaller companies in particular, investors can be confounded by a variety of concerns, including high valuations, wondering if they're too late after a big move higher, and trying to determine when a growth name will become profitable.Source: Shutterstock The losses of one growth stock, Roku (NASDAQ:ROKU), are narrowing. Based on the company's ability to grow its revenue, pare those losses and approach profitability, Roku stock may not be as expensive as it appears at first glance. Importantly, even after more than quadrupling in 2019, it is possible that Roku stock's market capitalization of around $14.3 billion can increase over the near-term.As a streaming-entertainment provider, ROKU inevitably draws comparisons to Netflix (NASDAQ:NFLX). Netflix is a story stock in its own right, and those comparisons are apt to get some investors excited about Roku stock. That excitement is justified, but the owners of Roku stock should not become enamored with comparisons between the companies. Rather, the best course of action is to evaluate Roku's businesses and worry about whether it is becoming the best version of itself, not the second coming of Netflix.InvestorPlace - Stock Market News, Stock Advice & Trading TipsRoku's player and platform segments are the primary drivers of its revenue and of ROKU stock price. * 7 Great Small-Cap Stocks to Buy "It derives key revenue from the Player segment which consists of net sales of streaming media players and accessories through retailers and distributors, as well as directly to customers through the company's website," according to Morningstar. "Platform segment consists of fees received from advertisers and content publishers, and from licensing the company's technology and proprietary operating system with TV brands and service operators." Banking on BlowoutsRoku's second-quarter report was a blowout, as the company reported a loss of 8 cents per share, well below the 21 cent per share loss Wall Street was expecting. That report, delivered last week, sent the ROKU stock price higher by more than 20% in one trading day after the shares had surged 14% in July.That report had analysts waxing bullish on ROKU, taking the average price target on Roku stock to $111 from $88 in just a day. But Roku stock closed just over $131 on Friday, indicating that the average price target may need to increase further."While Amazon(NASDAQ:AMZN) will always be an imminent threat, Roku TV is a runaway train," said Rosenblatt Securities Mark Zgutowicz, who has a $134 price target on Roku stock. "ROKU's brand and audience reach is essentially 'out-scaling' the unowned content model."The price target increases are starting to trickle in. On Aug. 12, Needham analyst Laura Martin boosted her forecast on Roku stock to $150 from $120, implying a gain of about 15% from the current ROKU stock price."The vast majority of streaming services to date have chosen to either charge a subscription fee OR give consumers free programming, supported by advertising," said Martin. ""Roku's focus is on free content, supported by ad dollars. Netflix is competing for subscription dollars." The Bottom Line: Analysts May Be Too Conservative on Roku StockThe video-streaming industry has a lot of favorable tailwinds, many of which ROKU can seize as it widens its platform, particularly as new streaming-content providers partner with the company. Non-cyclical streaming trends coupled with robust top-line growth and compelling customer engagement data indicate the valuation of Roku stock may ultimately prove too conservative.Roku's business model as an aggregator, rather than a purveyor, of content could not only prove cost-efficient relative to Netflix, but vital, as the likes of Walt Disney (NYSE:DIS) and Apple (NASDAQ:AAPL) launch streaming offerings.Trading at nearly 16 times Roku's sales, Roku stock isn't a value play, but its multiple is likely to prove warranted, given the company's enviable market niche and its management's history of solid execution.As of this writing, Todd Shriber doesn't own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Stop Worrying About Roku Stock's Valuation appeared first on InvestorPlace.
Let me start by stating that I'm a big fan of Roku (NASDAQ:ROKU) - this is a winning business with a winning strategy in a secular growth market, positioned for big user, revenue, and profit growth over the next several years, the sum of which should power ROKU stock higher in the long run.These winning attributes were on display when Roku reported blowout second-quarter numbers last week.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe report comprised ~40% active account growth (which was above expectations), ~70% aggregate streaming hours growth (above expectations), 25%-plus average revenue per user growth (above expectations), ~60% revenue growth (above expectations), and 55%-plus adjusted EBITDA growth (also above expectations). Management also issued an above-consensus third quarter and full-year 2019 guide.Even further, Roku reported the strong numbers only a few weeks after Netflix (NASDAQ:NFLX) reported an awful quarter. In other words, the whole "Roku is winning only because Netflix is winning" thesis got thrown out the window.Instead, Roku is standing on its own two feet and is winning because this company is transforming into the cable box of the streaming TV world.All in all, it was a great report which underscored the stock's secular bull thesis. In response, the stock soared. As of this writing, ROKU trades hands at about $13o, up nearly 35% from the Q2 print and up 340% year-to-date. * 15 Growth Stocks to Buy for the Long Haul Despite all that great news, this long-time bull (I really started pounding on the table to buy ROKU stock back in late 2018 / early 2019) is starting to take profits. Here's why. The Valuation Is StretchedI've been doing some trimming in ROKU in August because at current levels, the stock's valuation is too stretched relative to the fundamentals.The bull thesis on ROKU stock is simple. Roku is turning into the cable box of the streaming world. That means two things. A bunch of subscription sharing dollars, and a bunch of streaming TV ad dollars. Roku is already racking up both of those.They will continue to do so over the next several years as: 1) more and more consumers migrate to the streaming channel, and 2) more and more ad dollars flow from linear to streaming TV.Further, both of those revenue streams are high margin (60%-plus gross margins), so the pathway to big profits at scale has tremendous visibility. The only problem is that the potential profits this company could produce at scale, do not justify much further near term upside in ROKU stock.Roku has a realistic runway to grow active accounts by ~25% per year to 130 million by 2025. ARPU has a realistic runway to grow 10% per year to $35 by 2025, given the secular pivot of ad dollars from linear to streaming TV. Revenues could consequently grow at a 30%-plus rate to over $5 billion by 2025. Margins should run significantly higher long term thanks to increased scale.Even under all those optimistic assumptions, my best case scenario for 2025 EPS is $7. Based on an equally aggressive 35-forward exit multiple (which is average for application software stocks) and a 10% discount rate, that equates to a 2019 price target for ROKU stock of $150.Thus, even in a best case scenario, ROKU has a runway to just $150 by the end of the year. The Momentum Is RealI haven't sold my entire ROKU holding, and still am holding a core position, because this stock has a lot of momentum right now and could keep this momentum for the foreseeable future.Zooming out, we have a market right now defined by still strong labor conditions and low rates. That sort of environment is perfect for growth stocks. Strong labor conditions support continued robust consumption, which supported sustained big profit growth. At the same time, low rates support bigger multiples on stocks and make growth stocks look relatively less richly valued.As such, in today's market, stocks with good growth narratives are marching higher. It's that simple. With rates so low, investors are seemingly turning a blind eye to valuation and focusing exclusively on long term growth potential.This is an advantageous dynamic for ROKU stock. Valuation is a problem here, yes. But, the growth story is as hot as ever, and the momentum behind the stock is as powerful as ever.So long as rates remain low, then, this stock should grind higher. With rate cuts on the horizon, rates project to stay lower for longer. As such, ROKU projects to move higher for the foreseeable future based on momentum alone. Bottom Line on ROKU StockROKU is a long term winner. But, with the stock up 340% year-to-date and closing in on a best-case scenario 2019 price target, now seems like a good time to some more profit-taking and become a little a more cautious on the name.To be sure, that doesn't mean it's time to sell everything. I rarely like to fully exit long term growth winners, especially with rates so low. As such, so long as interest rates remain depressed and the narrative here remains hot, I'll hold onto my core position, trim more on big rallies, and buy more on big dips.As of this writing, Luke Lango was long ROKU and NFLX. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post I Love Roku Stock, but Here's Why I Sold Some After the Earnings Pop appeared first on InvestorPlace.
U.S. stock futures are aiming for their third lower open in a row. Ahead of the bell, futures on the Dow Jones Industrial Average are down 0.19%, and S&P 500 futures are lower by 0.19%. Nasdaq-100 futures have lost 0.25%.Source: Shutterstock In the options pits, put volume took the lead during yesterday's stock drop. With overall volume settling near average levels, however, the session lacked signs of panic. By the closing bell, about 16.2 million calls and 16.9 million puts traded.We did see an uptick in fear at the CBOE though. The single-session equity put/call volume ratio ramped to 0.78, nearing its high water mark for 2019. Meanwhile, the 10-day moving average ticked higher to 0.75.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOptions activity was buzzing in Uber (NYSE:UBER), Pfizer (NYSE:PFE) and Roku (NASDAQ:ROKU) on Monday.Let's take a closer look: Uber (UBER)The bottom fell out from under Uber Monday, driving the ride-hailing giant to its lowest closing price ever at $37. Since reporting earnings last Thursday, UBER stock has lost 13.9% amid heavy volume. Its intraday low of $36.08 from the day after its IPO beckons and will soon be tested.Uber's quarterly results showed a massive $5.2 billion loss that has shareholders rushing for the exits. Deteriorating fundamentals and bearish technicals always form a toxic brew. I suspect the big earning miss will keep a lid on UBER for the remainder of the quarter. Couple that with a now extremely bearish price trend and spectators have little reason to buy.The stock is dead money at best. Wait for an uptrend to emerge before even thinking about bullish plays. * 10 Real Estate Investments to Ride Out the Current Storm Monday's options trading reflected sellers' dominance. Puts outpaced calls with activity growing to 234% of the average daily volume. In total, 119,490 contracts traded with puts accounting for 58% of the sum.Implied volatility popped to 47%, halting Friday's strong volatility crush after earnings. Pfizer (PFE)Pfizer stock's descent accelerated Monday, pushing the pharmaceutical titan to a new 52-week low. The 2.6% whack saw heavy volume flashing again in a long line of distribution days. Last month's earnings and the announcement that the company was spinning off its generic drug business with Mylan (NYSE:MYL) have rattled its stock price and created confusion over what impact the move will have on Pfizer's dividend.Since last year's peak, PFE stock has lost 24% and is offering what could turn out to be a compelling long-term buying opportunity. Significant support looms at $34, and the stock is flashing some extreme oversold readings, suggesting the time for a rebound is nigh. Naked puts such as the Sep $34 strike offer a compelling high probability trade if you're looking to bank on the bounce.On the options trading front, traders favored puts on the day. Activity swelled to 189% of the average daily volume, with 122,018 total contracts traded. Puts accounted for 53% of the take.The increased demand drove implied volatility higher on the day to 26%, placing it at the 54th percentile of its one-year range. Premiums are juiced, which makes selling puts all the more attractive. Roku (ROKU)Roku's bid for world domination continued in earnest Monday with the video streaming service rocketing to a new record high of $136.55. By day's end, the gains were pared, but ROKU stock still notched a new closing high. Buyers' enthusiasm following last week's better-than-expected earnings has been off the charts and reflects just how in love the Street has become for the stock.In the short run, ROKU is flashing extreme overbought readings. The red-hot stock will likely cool over the coming days as profit-taking strikes to lock-in the recent good fortune. Given the powerful uptrend, however, you should view all weakness as a buying opportunity. * 7 AI Stocks to Watch With Strong Long-Term Narratives As far as options trading goes, calls led the way with activity rising to 159% of the average daily volume at 152,478 contracts. Calls added 54% to the session's sum.Increased demand halted the post-earnings volatility crush, pushing the metric back up to 62%. That lands it at the 28th percentile of its one-year range. Premiums are now pricing in daily moves of $5.27 or 3.9%.As of this writing, Tyler Craig didn't hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Real Estate Investments to Ride Out the Current Storm * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk * 7 Safe Dividend Stocks for Investors to Buy Right Now The post Tuesday's Vital Data: Uber, Pfizer and Roku appeared first on InvestorPlace.
RBC Capital Market analyst Mark Mahaney downgraded Roku Inc (NASDAQ: ROKU )'s stock rating from Outperform to Sector Perform in early July. The stock has gained more than 30% since the rating revision, ...
Every investor looks for a winner, and while “past performance does not guarantee future returns,” it’s only natural to look at stocks which have been successful when choosing a portfolio. Here, we look at three stocks have more than doubled in value over the past twelve months and show every sign of keeping their gains and continuing to return performance for investors. The NASDAQ index is up 18% this year, but all three of these stocks have surpassed that by an order of magnitude. Cronos Group, Inc. (CRON) Canada’s third largest cannabis company is up 124% in the last year. The company has benefited from the general gains of the cannabis industry in the wake of Canada’s sweeping legalization of marijuana in the second half of 2018. Q2 results, released last week, underline the gains. Cronos beat Wall Street’s expectations by a country mile, posting a C$0.22 earning per share instead of the forecast C$0.02 loss. Gross revenues, at C$10.78 million, were almost double the expected C$5.6 million. A company statement said that a combination of increased production and increased demand in the adult-use recreational market supported the quarter-over-quarter revenue growth.Cronos’s gains are less surprising when put into the company’s particular context: it’s positioning itself as primarily a CBD supplier, dealing in the non-psychoactive cannabidiol derivatives prevalent in the medial markets. CBD and other derivatives lie on the high-margin end of the marijuana industry, so Cronos should see future gains accordingly. The CBD market is expected to show a steep growth curve over the next few years, expanding more than 100% compounded annually through 2023.Cronos ended 1H19 with one serious drawback and one big advantage in its ledger. As a potential pothole, the company lags its peers in cannabis production. Where Aurora (ACB), Canada’s largest producer, predicts reporting 25,000 to 30,000 kilos available for sale last quarter, Cronos only sold 1,584 kilos in Q2. Cronos will have to address this issue, and improve production going forward, if it wants to remain profitable.On the plus side, Cronos ended Q2 with an enormous cash reserve. The company has over C$2.3 billion– about 39% of its total market cap – available in a combination of cash-on-hand and short-term investments. This cash boon comes mainly from tobacco company Altria’s (MO) recent US$1.8 billion investment in Cronos.New markets are uncertain, and like many companies making a mark in the newly legalized cannabis industry, Cronos reflects that uncertainty with mixed reviews from the analysts. The strong earnings, report, however, has brought it two well-deserved buy ratings. Writing from CIBC, John Zamparo reiterated his Outperfom on the stock, and set a C$25 price target, implying an upside of 43%. Piper Jaffray analyst Michael Lavery was impressed enough after the Cronos earnings call, when the company gave clarification on future product and sourcing pricing matters, that he initiated coverage of CRON with a Buy rating and a price target of US$18. His target suggests an upside of 35% for CRON shares.Overall, Cronos Group has a Moderate Buy from the analyst consensus, based on 3 buys, 3 holds, and 1 sell given in the past three months. Shares are selling for US$13.25 in New York, so the US$22.50 average price target gives an upside potential of 69%. Roku, Inc. (ROKU)This Over-the-Top online video streaming company is up 130% since a year ago, reflecting the dynamism of the Video-on-Demand sector. A direct competitor of Netflix (NFLX), Roku is positioning itself for continued growth in the online streaming business, even as Apple (AAPL) and Disney (DIS) enter the field later this year. Roku will survive by supporting numerous streaming companies through its hardware, collecting royalties on subscriptions and providing customers what they really want: variety in programming.It’s a strong model, with plenty of potential in rapidly expanding niche, and this month’s Q2 earnings report bears that out. Roku clobbered Wall Street’s estimates, beating the EPS forecast by 14 cents per share. Revenue grew 59% quarter-over-quarter, coming in at $250 million against a forecast of $224 million.In the wake of the blockbuster earnings report, Rosenblatt’s Mark Zgutowicz (a 5-star analyst according to TipRanks) upgraded ROKU shares from Neutral to Buy, saying, “Roku's earnings report marks the second consecutive quarter of strong growth across hours viewed, average revenue per user and users. The strong performance signals the company isn't facing hurdles in reselling inventory at a premium cost… Roku's momentum can sustain over the coming years and the company could penetrate around 50% of the total addressable market of 138 million households in 2027.” Zgutowicz backed up his optimism on the stock by nearly doubling his price target – from $77 to $134. His new target may not be high enough, however, as ROKU shares are on a tear, having gained 33% since the earnings release.Stephens’ Kyle Evans (a 4-star analyst) also upgraded ROKU shares after hearing the Q2 earnings. He wrote of the company, “We believe Roku's fundamentals remain sound and that its nexus business model will continue to power solid financial results.” Evans also increased his price target, from $84 to $120, but Evans’ target, too, has been outpaced by ROKU’s market performance.That Wall Street’s analysts will have to set new, higher, price targets for ROKU is borne out by the most recent rating, from Needham’s Laura Martin (a 5-star analyst). Martin was impressed by the earnings, but sees Roku’s biggest advantage in its business model: “The list of streaming video providers continues to expand and presents a complex or confusing sentiment for consumers with more than one subscription. Roku offers the convenience of aggregating both big and small providers on one easy-to-use platform.” She gives the stock a $150 price target, suggesting an upside of 11%. Justifying her position, Martin adds, “Online aggregators who get ahead, stay ahead.”ROKU shares are selling for $134, 14% higher than the average price target of $115. That average, however, is based on targets set the day after the earnings report; as noted above, ROKU shares have jumped 33% since then. Roku maintains a Moderate Buy rating from the analyst consensus, based on 7 buys, 4 holds, and 1 sell given in the past three months. Of the Buy ratings, 6 were set last week, indicating how quickly a market consensus can shift. Shopify, Inc. (SHOP)Headquartered in Ottawa, Canada, Shopify is best known for its eponymous e-commerce platform. Shopify offers online merchants a set of tools to facilitate customer engagement, marketing, payment processing, and product shipping. The success of the platform has supported the stock’s 145% gain over the past year. The company’s year-to-date gain, of 164%, is even more impressive. For comparison, the S&P 500 is up 15% year-to-date.Shopify’s earnings have reflected the stock’s gains. For Q2, the company reported a massive beat on earnings. The 14 cent EPS was seven times higher than the 2-cent expectation, and the quarterly revenue of $36 million easily passed the $350 million analysts had forecast.Investor confidence and high earnings have brought in plenty of love from those same analysts. Writing from Canaccord, David Hynes (a 5-star analyst) said, “Shopify's results included 48% revenue growth, operating profitability, and gross merchandise volume that surpassed $1B per week… Shopify has the underpinnings of what could be a $100B market cap company in the next 6-8 years. Look for pullbacks in the stock as opportunities to add to positions.” Hynes gives SHOP shares a $385 price target, suggesting an upside potential of 5% from current prices.Hynes is not the only analyst to bump up his price target on SHOP. KeyBanc’s Josh Beck (a 5-star analyst) also set a $385 target, noting, “The growth runway at Shopify is substantial… Shopify's cloud-based, mobile-centric platform is well positioned…” And writing from Wells Fargo, Timothy Willi (a 4-star analyst) set the most aggressive price target, of $400. He said of the company, “Shopify also noted a stronger than expected response to its fulfilment network… That will benefit new merchant acquisition while helping existing merchants reduce shipping costs and times and drive further gross merchandise volume growth.” Willi’s price target indicates a possible 9% upside for SHOP.Like Roku above, Shopify’s share price has posted strong gains in the immediate aftermath of an expectation-beating earnings report. The current share price of $366 is 6% higher than the price target of $343. The stock gets a Moderate Buy from the analyst consensus, based on 12 buy, 8 hold, and 2 sell ratings in the past three months. Of the buy ratings, 8 have been given since the August 1 earnings release.Find out what stocks are hot at TipRanks' Analysts' Top Stocks page.
While shares of Roku Inc. (ROKU) have surged a whopping 338% year-to-date, the bears point out that this doesn’t necessary imply smooth sailing for the streaming player company. Despite seeing its fair share of ups and downs, Roku may have just gotten the boost it needed to keep the bulls firmly in their camp. On August 12, Needham's Laura Martin raised its price target from $120 to $150, sending share prices soaring 7%. “Roku is the dominant internet aggregator for streamed TV & movie content, like YouTube is for user generated content, at about 1/20th the valuation," the five-star analyst according to TipRanks wrote in a note to clients. We take a closer look to see who has it right on Roku, the bulls or the bears. The Bull Case Some investors originally expressed concern that Roku’s growth would slow after Netflix’s (NFLX) July 17 Q2 earnings release showed a decline in subscriber acquisition. However, Roku’s business strategy is fundamentally different from Netflix’s. Unlike Netflix and Hulu, which spend more on content as well as charge for subscriptions, Roku’s business model is based on its hardware and platform, which includes advertising and other services. This strategy appears to be paying off based on its second quarter earnings release. On August 7, the company reported that quarterly revenue reached $250 million, up 59% year-over-year. Management attributed these gains to the doubling of its monetized video ad impressions year-over-year, with player growth also gaining 24% year-over-year. More good news came when the company raised its full year guidance, saying 2019 revenue will now exceed $1 billion. Investors now have another reason to be excited when Roku announced it had reached an agreement with Walmart (WMT) to offer new Roku devices under WMT’s Onn brand. The company has also made progress in expanding the content distribution segment of its business through its Roku play, with it expecting even more gains after Disney+, Disney’s (DIS) streaming service, is launched on November 12.Roku claims the Disney+ launch will give it the advantage it needs to leave its competitors in the dust. "We are excited, to say the least, about the coming services into [over the top], and believe that we are an essential platform for these new services,” said Scott Rosenberg, the head of the company's platform business. On August 8, Roku received a vote of confidence from Rosenblatt Securities. Mark Zgutowicz, a five-star analyst, upgraded the rating to a Buy and raised the price target from $77 to $134. “The company is essentially out-scaling the unowned content model,” he said. The analyst boasts a 73% success rate and gets an average return of 26% per rating. Four-star analyst, Kyle Evans, agrees that the streaming company’s strong Q2 performance warranted a ratings boost. On the same day as Zgutowicz, he upgraded the stock to a Buy and raised the price target from $84 to $120. “The quarter benefited from the revaluation of multi-element content distribution agreements (called out by management but not quantified), but we believe Roku's fundamentals remain sound and that its nexus business model will continue to power solid financial results,” the Stephens analyst said. The Bear Case Roku faces steep competition in the streaming player space. Amazon (AMZN), Google (GOOGL) and Apple (AAPL) all offer streaming players that go head to head with Roku’s. However, the real threat comes just from AMZN. The ecommerce giant made significant progress in its efforts to expand its Fire TV player customer base, with it boasting 34 million regular users compared to Roku’s 30.5 million active accounts. According to a Conviva report released on August 7, Roku still leads the race in terms of market share with it controlling 43% of the connected TV space vs Amazon’s 18%. There are also concerns regarding the streaming platform’s expensive valuation. Its market cap is over $15 billion, with revenue for full year 2019 expected to be only $1 billion. Four-star analyst, Alan Gould, said “The company remains well positioned in the TV ecosystem's shift to streaming. Roku will continue to exceed expectations, particularly as the launch of Disney+ (DIS) draws closer. However, it’s difficult to justify the $13B enterprise value on the stock, or over 10-times next year's platform revenue.” On August 8, the Loop Capital Markets analyst reiterated his Sell rating but raised his price target from $45 to $80, indicating 40% downside. Five-star analyst, Benjamin Swinburne, agrees that the competition from Amazon and high valuation suggests that now isn’t the time to buy. On August 9, he reiterated his Hold rating and raised the price target from $70 to $100, implying 26% downside. The Morgan Stanley analyst has a 60% success rate and gets an average return of 12% per rating. The Final Verdict The jury is still out on Roku. It has a ‘Moderate Buy’ analyst consensus and a $115 average price target, suggesting 14% downside. Discover the Analysts’ Top-Rated Stocks right now
It was a very tough day in the stock market today. The S&P 500, Dow Jones Industrial Average, Nasdaq and Russell all fell more than 1% on the day as investors continue to worry about a plethora of issues. Global Concerns RemainAs cool as it would seem to have a mortgage with a negative interest rate, it's somewhat alarming with what's going on globally. Interest rates continue to hover near zero, and now even the United States is cutting rates.Everyone is afraid of another recession wreaking havoc on the global economy. Without being able to cut interest rates, investors are uncertain how global central banks plan to combat the eventual economic slowing. Of course, a trade war between the world's two largest economies and concern over an escalating currency battle doesn't do much to settle those fears.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNor does it help when treasuries continue press higher -- with the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) looking like a growth stock -- and as yield spreads continue to shrink. Of course, this has dealt a blow to financials, as a shrinking spread crimps profitability for certain banking segments.On Monday, there were even more dramatic headlines to sort through. The protests in Hong Kong continue to intensify, causing investor concern about what even more escalation could look like. Oh yeah, and Argentina's stock market cratered 35% and its currency fell 25% after a surprise election result.It also doesn't help that analysts keep increasing the odds of a coming recession. Just today, investors are reading about Goldman Sachs decreasing GDP growth estimates and Bank of America increasing their odds of a recession. * 8 Dividend Aristocrat Stocks to Buy Now No Matter What To say Monday was full of drama would be an understatement -- and there's no telling if the selling is ready to let up. Where Can We Go From Here?The saving grace? The U.S. economy. There have been a few yellow flags lately, but until the labor market and real estate prices start to show signs of distress, investor and consumer sentiment may remain elevated. Of course, either one (or both) of those readings may take a dive if the stock market does too.Investor sentiment took a real nasty turn at the start of the month once the markets started to decline in earnest. We've since seen a snap-back rally. Is it over so soon?Last week, the S&P 500 traded down to its 200-day moving average in the overnight session of the futures market. Unfortunately, the index -- as well as the SPDR S&P 500 ETF (NYSEARCA:SPY) or the PowerShares QQQ ETF (NASDAQ:QQQ) -- didn't trade down to the 200-day moving average during regular trading hours. If you recall, that made us suspicious of the stock market's recent rally.The index promptly rallied up to the 50-day moving average, retracing about 50% of the decline and paused there for two sessions. It was the perfect setup though, because it would either hurdle the 50-day or fail to hold the 100-day moving average.On Monday, the S&P 500 lost the 100-day moving average. Two scenarios are now possible, with the first being that the SPX reclaims the 100-day moving average. The other option? We retest the 2,825 to 2,850 area. While no one likes to see the market in decline, it would be healthy to see a tag of the 200-day moving average at 2,793.An overshoot to the 38.2% retracement at 2,767 is possible.As tough as it is, try to keep it simple. The index needs to reclaim the 100-day, otherwise lower prices are in store. Movers in the Stock Market TodayEven on the painful days, "Merger Monday" rings true. Well, sort of anyway. The only thing more dramatic than Monday's headlines has been the ongoing merger efforts between CBS (NYSE:CBS) and Viacom (NASDAQ:VIA, NASDAQ:VIAB).The talks have been going on for years -- literally -- with nothing but disappointment to show for it. Let's call it, the merger that cried wolf. Reports over the weekend suggested that a deal as soon as Monday morning may come. However, confirmation never came along.Apparently, it's down to just figuring out the conversion price of the all-stock deal. But is there even a winner? Both A-class and B-class shares of Viacom were down almost 5% on the day, while CBS stock fell nearly 2%.Roku (NASDAQ:ROKU) was a rare outperformer, with shares rallying over 7% on the day. The catalyst for Monday's rally came from the analysts at Nomura, who raised their price target from $120 to $150. Aside from owning the Street-high target on Roku, they maintained the stock as their top mid-cap pick for 2019.(Here's how to trade Roku, by the way).Finally, Nike (NYSE:NKE) fell 0.4% despite the company's plan to launch a subscription service for children's shoes. The hope is to collect a recurring revenue stream in exchange for parents being able to swap out shoes more quickly for their children. That has obvious benefits for Nike and its investors.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell was long ROKU. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Large-Cap Stocks to Sell Right Now * 7 Stocks Under $7 to Invest in Now * 7 Marijuana Stocks With Critical Levels to Watch The post Stock Market Today: The Merger That Cried Wolf appeared first on InvestorPlace.
It was a tough day on Wall Street, with investors hitting the exits on trade worries, concerns over Hong Kong, and as bond prices again rally. The markets are often volatile in August, and 2019 is proving to be no exception. Here are a few top stock trades to watch. Top Stock Trades for Tomorrow No. 1: RokuAt one point, Roku (NASDAQ:ROKU) stock was up 8% on Monday. The move adds to Roku's three-day gain, with shares up more than 30% since reporting earnings last week.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMonday's move was inspired by the analysts at Nomura, who upped their price target to $150 per share. Despite the big move, shares are hardly overbought -- at least technically speaking via the RSI indicator (blue circle). * 7 Stocks Under $7 to Invest in Now A move into the upper $130s or lower $140s is still possible, with a Fibonacci extension near the latter. If the overall selling pressure in the market is too great, though, Roku may not be immune. In that case, see if prior short-term channel resistance (black line) can act as support on a pullback. Top Stock Trades for Tomorrow No. 2: PinterestPinterest (NYSE:PINS) outperformed the market on Monday, but did so in a very strange way.In midday trading, shares suddenly spiked higher, surging to $36 before retreating and giving up almost all of its 6% intraday gain. $34 remains a tough level for the stock, even after its strong earnings report last week.That said, it continues to hold $32 and its 8-day moving average. However, like other stocks, support may give way should overall market selling pressure pick up. Keep an eye on $32 support, and $31.50 just below that. Breakout traders may consider going long PINS on a close over $34. Top Stock Trades for Tomorrow No. 3: NetflixNetflix (NASDAQ:NFLX) stock held up okay on Monday, but its chart still looks concerning. Below, the $305 to $310 level is a concern. It will put the August lows near $297 on the table. A close below that opens up NFLX to a decline down the $270 to $275 area.On a rally, see if NFLX stock can reclaim its 20-day moving average. If it can, its 200-day is the next upside target. Top Stock Trades for Tomorrow No. 4: DeereDeere (NYSE:DE) stock is looking ugly. Shares rallied into former support at $155 as well as its 200-day moving average before tumbling more than 4% on Monday. The company reports earnings on Friday, adding more volatility into the stock.At this point, DE stock either needs to reclaim the $155/200-day moving average area or pull back to range support near $135. Top Stock Trades for Tomorrow No. 5: McDonald'sMcDonald's (NYSE:MCD) stock may be a flight-to-safety name, but shares are under pressure on a day where the stock market is in decline as well.The selling pressure comes as shares run into channel resistance. Now I'm looking for a test of channel support. That would put MCD in play somewhere near $213. As much as I'd hate to see MCD break channel support, a dip to $210 and the 50-day moving average would also be attractive.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long ROKU and PINS. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Large-Cap Stocks to Sell Right Now * 7 Stocks Under $7 to Invest in Now * 7 Marijuana Stocks With Critical Levels to Watch The post 5 Top Stock Trades for Tuesday: ROKU, PINS, NFLX, MCD appeared first on InvestorPlace.
Is it fair for investors to compare Roku Inc (NASDAQ: ROKU) with Netflix, Inc. (NASDAQ: NFLX)? Roku's streaming platform will support the growing list of Netflix rivals, including Walt Disney Co (NYSE: DIS), Martin said.
A gain of 309.01% in 2019 for shares of Roku, Inc. (ROKU) tells of story of big demand for the shares. This demand is likely big buying in the shares. This is bullish activity because the shares are heading higher on increasing volumes, indicating that a buyer is involved.
Roku Inc. shares are up 2.5% in premarket trading Monday after Needham analyst Laura Martin raised her price target on the stock to $150 from $120. Her new target is the highest listed on FactSet. Martin's view is that Roku is better positioned than Netflix Inc. to benefit from the growth of streaming media. "The vast majority of streaming services to date have chosen to either charge a subscription fee OR give consumers free programming, supported by advertising," Martin wrote. "Roku's focus is on free content, supported by ad dollars. Netflix is competing for subscription dollars." Roku's stock has soared more than 300% so far this year, as the S&P 500 has risen 16%.
Lyft's (NASDAQ:LYFT) Q2 results, reported on Aug. 7, were better than expected. Source: Shutterstock InvestorPlace - Stock Market News, Stock Advice & Trading TipsEven better than the revenue beat was the company's increased full-year guidance. Lyft stock price initially jumped on the news, then gave up all of its gains as the stock market retreated amid trade-war worries. . While it's great to see the company's outlook is improving, I don't believe that's a reason to buy Lyft stock. Here's why. Investing Is About RetirementMost people invest to fund their retirements. As a result, investors should ensure that their capital is protected as much as possible. Buying stocks is not as much about hitting a home run as it is about getting a bunch of singles over a long period. * 7 Large-Cap Stocks to Sell Right Now Take Lyft stock. It went public on March 28 at $72 per share and gained 8.7% in its first day of trading. Since then, Lyft stock price has lost all of its first-day gains and then some. Down 18% since its IPO, Lyft stock needs more good news like its raised full-year outlook if it's going to make a comeback to $72. However, that shouldn't matter to those investing for their retirements. They ought to be more concerned about Lyft stock price dropping further. As long as LYFT still doesn't have a pathway to GAAP profitability, I can't recommend Lyft stock in good conscience. LYFT Has Got to Have a Shot at ProfitabilityIn April, I compared Lyft to ShiftPixy (NASDAQ:PIXY), a company that operates a platform for hiring and scheduling shift work. It brings shift workers and employers together to do business. Like LYFT, PIXY doesn't make money, but could soon. That's why I suggested that, as speculative plays go, ShiftPixy is a better opportunity than Lyft. Since then, PIXY has lost more than half its value. While Lyft has an $18 billion market cap and is a massive company relative to ShiftPixy, they both have one thing in common: They lose a lot of money. And companies that lose money are for speculators, not investors. In Lyft's Q2, it had revenue of $867.3 million and an adjusted net loss of $197.3 million. That means for every dollar of sales, Lyft lost 23 cents. By comparison, ShiftPixy had $14.3 million in revenue last quarter and a net loss of $5 million, which means it lost 35 cents for every dollar of sales it generated in the quarter. Both companies' numbers are terrible, but at least the owners of ShiftPixy stock know they're dealing with a speculative investment. Average retail investors who don't know any better see Lyft's 72% year-over-year increase in revenue in Q2, along with the 41% YoY increase in its number of active riders, and assume that, given time, LYFT will make a profit. The truth is it might never make a profit, despite its recent good news.In fiscal 2019, Lyft expects to generate revenue of at least $3.47 billion with an adjusted EBITDA loss of $850 million to $875 million. In 2018, Lyft's EBITDA's loss was around $850 million. Do you really want to own stock in a company that's losing close to $1 billion annually? I sure don't. The Bottom Line on Lyft StockOn Aug. 19, the lock-up period will end on about 257.6 million shares of Lyft stock owned by company insiders, directors and officers. As those insiders look to sell some of their shares, the Lyft stock price could take a hit. However, because Lyft stock is trading well below its IPO price, it's unlikely that the earlier-than-expected end of the lock-up period will result in a mass exodus of pre-IPO investors.But while the company's improved outlook is a good morale booster for its employees, the reality is that the guidance hike is not a reason to buy Lyft stock. In my opinion, investors should only buy Lyft stock if the company demonstrates that it has a pathway to profitability. At the moment, such a path doesn't exist.If you're looking to bet on a money loser, Roku (NASDAQ:ROKU) is a much smarter bet. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 Dividend Aristocrat Stocks to Buy Now No Matter What * 7 Stocks to Buy to Ride the Vegan Wave * 4 Safe Stocks to Buy Amid Trade War Turbulence The post Lyft's Guidance Hike Is Not a Reason to Buy Lyft StockÂ appeared first on InvestorPlace.
Investors may have missed this brief revelation that could have big implications for Roku's future.