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

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Roku (ROKU - Free Report) closed at $324.01 in the latest trading session, marking a +0.25% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.18%.

Heading into today, shares of the video streaming company had gained 0.61% over the past month, outpacing the Consumer Discretionary sector's loss of 0.52% and lagging the S&P 500's gain of 2.96% in that time.

ROKU will be looking to display strength as it nears its next earnings release, which is expected to be November 3, 2021. 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, our latest consensus estimate is calling for revenue of $683.63 million, up 51.36% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.34 per share and revenue of $2.85 billion, which would represent changes of +1057.14% and +60.49%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for ROKU. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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. The Zacks Consensus EPS estimate has moved 2.06% higher within the past month. ROKU is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note ROKU's current valuation metrics, including its Forward P/E ratio of 241.37. Its industry sports an average Forward P/E of 17.64, so we one might conclude that ROKU is trading at a premium comparatively.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 67, which puts it in the top 27% 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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