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

In the latest close session, Roku (ROKU) was down 3.32% at $91.65. The stock's change was less than the S&P 500's daily loss of 0.61%. At the same time, the Dow lost 0.26%, and the tech-heavy Nasdaq lost 0.93%.

Heading into today, shares of the video streaming company had gained 14.31% over the past month, outpacing the Consumer Discretionary sector's loss of 2.13% and the S&P 500's loss of 2.25%.

Investors will be eagerly watching for the performance of Roku in its upcoming earnings disclosure. The company's upcoming EPS is projected at $0.34, signifying a 278.95% increase compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $1.2 billion, reflecting a 17.88% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $2.1 per share and a revenue of $5.51 billion, demonstrating changes of +255.93% and +16.28%, respectively, from the preceding year.

Investors should also note any 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 business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 65.12% higher. At present, Roku boasts a Zacks Rank of #1 (Strong Buy).

From a valuation perspective, Roku is currently exchanging hands at a Forward P/E ratio of 45.17. For comparison, its industry has an average Forward P/E of 11.47, which means Roku is trading at a premium to the group.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 149, positioning it in the bottom 40% 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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

This article originally published on Zacks Investment Research (zacks.com).

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