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Roku (ROKU) Stock Declines While Market Improves: Some Information for Investors

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In the latest trading session, Roku (ROKU - Free Report) closed at $108.82, marking a -1.85% move from the previous day. This change lagged the S&P 500's 0.88% gain on the day. Elsewhere, the Dow gained 0.38%, while the tech-heavy Nasdaq added 1.31%.

The stock of video streaming company has risen by 21.85% in the past month, leading the Consumer Discretionary sector's gain of 1.52% and the S&P 500's gain of 2.48%.

Investors will be eagerly watching for the performance of Roku in its upcoming earnings disclosure. In that report, analysts expect Roku to post earnings of $0.28 per share. This would mark year-over-year growth of 216.67%. In the meantime, our current consensus estimate forecasts the revenue to be $1.35 billion, indicating a 12.62% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $0.33 per share and revenue of $4.69 billion, which would represent changes of +137.08% and +14.15%, respectively, from the prior year.

Any recent changes to analyst estimates for Roku should also be noted by investors. 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.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.38% higher. Roku is currently a Zacks Rank #2 (Buy).

Looking at valuation, Roku is presently trading at a Forward P/E ratio of 334.7. This signifies a premium in comparison to the average Forward P/E of 15.5 for its industry.

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 158, positioning it in the bottom 37% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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