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

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In the latest trading session, Roku (ROKU - Free Report) closed at $338.93, marking a -1.6% move from the previous day. This change lagged the S&P 500's 0.37% gain on the day.

Coming into today, shares of the video streaming company had gained 7.98% in the past month. In that same time, the Consumer Discretionary sector lost 1.97%, while the S&P 500 gained 2.13%.

ROKU will be looking to display strength as it nears its next earnings release. In that report, analysts expect ROKU to post earnings of $0.06 per share. This would mark a year-over-year decline of 33.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $683.63 million, up 51.36% from the year-ago period.

ROKU's full-year Zacks Consensus Estimates are calling for earnings of $1.34 per share and revenue of $2.85 billion. These results would represent year-over-year changes of +1057.14% and +60.49%, respectively.

Investors should also note any recent changes to analyst estimates for ROKU. These recent revisions tend to reflect the evolving nature of short-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 has moved 2.06% higher. ROKU is currently a Zacks Rank #1 (Strong Buy).

Investors should also note ROKU's current valuation metrics, including its Forward P/E ratio of 257.24. This valuation marks a premium compared to its industry's average Forward P/E of 15.57.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 60, putting it in the top 24% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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