Now Is A Suitable Moment For A Long-Term Purchase Of Roku Inc. (NASDAQ: ROKU)


    Fidelity Management & Research Co.. recently announced the acquisition of new stake in Roku Inc. (NASDAQ:ROKU). The institutional investor has increased its shareholding in the Communication Services company by 8.49% to 10.08 million shares with purchase of 0.79 million shares. This fresh investment now brings its stake to 9.90% valued currently at $1.56 billion. In addition, The Vanguard Group, Inc. raised its holdings by 0.79 million to 8.34 million shares. And BlackRock Fund Advisors has lifted its position by 15.05% or 0.55 million shares – to 4.17 million shares.

    With over 26.69 million Roku Inc. (ROKU) shares trading Friday and a closing price of $172.85 on the day, the dollar volume was approximately $4.61 billion. The shares have shown a positive weekly performance of 17.48% and its price on 08/28/20 gained nearly 7.38%. Currently, there are 122.61M common shares owned by the public and among those 105.18M shares have been available to trade.

    An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 23 analysts who have offered their price forecasts for ROKU have a consensus price objective of $164.64. The analysts have set the share’s price value over the next 12 months at a high of $208.00 and a low of $65.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Roku Inc. stock is 2.30 for the next 12 months. The average price target is -4.99% below its last price level and a downside to the estimated low will see the stock lose -165.92% over that period. But an upside of 16.9% will see the stock hit the forecast high price target while mean target price for the stock is $183.00.

    Insiders at the company have transacted a total of 362 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 94 of these insider trades were purchases, accounting for 2,022,541 shares. Insider sales of the common stock occurred on 268 occasions, with total insider shares sold totaling 2,061,803 shares.

    The top 3 mutual fund holders in Roku Inc. are Fidelity Growth Company Fund, Vanguard Total Stock Market Index, and ARK Innovation ETF. Fidelity Growth Company Fund owns 3.25 million shares of the company’s stock, all valued at over $503.74 million. The company sold 33643.0 shares recently to bring their total holdings to about 3.20% of the shares outstanding. Vanguard Total Stock Market Index sold 6757.0 shares to see its total holdings shrink to 2.9 million shares valued at over $448.67 million and representing 2.85% of the shares outstanding. ARK Innovation ETF bought 24786.0 shares to bring its total holdings to over 2.32 million shares at a value of $359.43 million. ARK Innovation ETF now owns shares totaling to 2.28% of the shares outstanding.

    Shares of Roku Inc. (NASDAQ: ROKU) opened at $162.00, up $1.03 from a prior closing price of $160.97. However, the script later closed the day at $172.85, up 7.38%. The company’s stock has a 5-day price change of 17.48% and 53.03% over the past three months. ROKU shares are trading 29.09% year to date (YTD), with the 12-month market performance up to 15.33% higher. It has a 12-month low price of $58.22 and touched a high of $176.55 over the same period. Currently, 26.69 million shares have been traded, compared to an average intraday trading volume of 9.42 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 12.97%, 19.20%, and 35.86% respectively.

    Institutional ownership of Roku Inc. (NASDAQ: ROKU) shares accounts for 72.00% of the company’s 122.61M shares outstanding. Mutual fund holders own 4.01%, while other institutional holders and individual stakeholders account for 43.46% and 34.26% respectively.

    It has a market capitalization of $20.07B. The earnings-per-share (ttm) stands at -$1.15. Price movements for the stock have been influenced by the stock’s volatility, which stands at 6.11% over the week and 4.92% over the month.

    Analysts forecast that Roku Inc. (ROKU) will achieve an EPS of -$0.42 for the current quarter, -$0.19 for the next quarter and -$1.08 for 2021. The lowest estimate earnings-per-share for the quarter is -$0.53 while analysts give the company a high EPS estimate of -$0.02. Comparatively, EPS for the current quarter was -$0.22 a year ago. Earnings per share for the fiscal year are expected to decrease by -514.50%, and 25.00% over the next financial year.

    If you are looking to buy this stock, then you may note that the average analyst recommendation by 23 brokerage firm advisors rate Roku Inc. (ROKU) as a “Moderate Buy” at a consensus score of 2.30. Specifically, 15 Wall Street analysts polled rate the stock as a buy, while 6 of the 23 advise that investors “hold,” and 2 rated it as a “Sell.”

    Looking at the support for the ROKU, a number of firms have released research notes about the stock. Citigroup stated their Buy rating for the stock in a research note on August 26, 2020, with the firm’s price target at $180. Deutsche Bank coverage for the Roku Inc. (ROKU) stock in a research note released on August 12, 2020 offered a Buy rating with a price target of $185. The Benchmark Company was of a view on August 06, 2020 that the stock is Buy, while Rosenblatt gave the stock Buy rating on August 04, 2020, issuing a price target of $145- $190. MoffettNathanson on their part issued Neutral rating on July 20, 2020.


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