Roku (ROKU) closed at $142.34 in the latest trading session, marking a +1.17% move from the prior day. This change outpaced the S&P 500's 0.79% loss on the day. Meanwhile, the Dow lost 0.26%, and the Nasdaq, a tech-heavy index, lost 1.55%.
The video streaming company's stock has dropped by 2.07% in the past month, falling short of the Consumer Discretionary sector's gain of 0.62% and the S&P 500's gain of 4.28%.
The upcoming earnings release of Roku will be of great interest to investors. The company is predicted to post an EPS of $0.61, indicating a 771.43% growth compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $1.3 billion, indicating a 16.98% upward movement from the same quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $2.41 per share and revenue of $5.55 billion, indicating changes of +308.47% and +17.23%, respectively, compared to the previous year.
Investors should also pay attention to any latest changes in analyst estimates for Roku. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate has moved 0% higher within the past month. At present, Roku boasts a Zacks Rank of #3 (Hold).
Digging into valuation, Roku currently has a Forward P/E ratio of 58.35. For comparison, its industry has an average Forward P/E of 13.28, 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 69, positioning it in the top 29% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Roku, Inc. (ROKU): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).