Here's Why Roku (ROKU) Fell More Than Broader Market

Roku (ROKU) closed the latest trading day at $63.58, indicating a -0.39% change from the previous session's end. The stock's change was less than the S&P 500's daily loss of 0.14%. Meanwhile, the Dow lost 0.77%, and the Nasdaq, a tech-heavy index, added 0.17%.

Shares of the video streaming company witnessed a gain of 0.85% over the previous month, trailing the performance of the Consumer Discretionary sector with its gain of 3.33% and the S&P 500's gain of 5.34%.

Analysts and investors alike will be keeping a close eye on the performance of Roku in its upcoming earnings disclosure. The company is expected to report EPS of -$0.68, up 50.72% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $850.98 million, up 14.84% from the prior-year quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of -$2.16 per share and a revenue of $3.85 billion, indicating changes of +56.89% and +10.41%, respectively, from the former year.

Any recent changes to analyst estimates for Roku should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.15% upward. Right now, Roku possesses a Zacks Rank of #3 (Hold).

The Broadcast Radio and Television industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 179, which puts it in the bottom 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.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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