ROKU

Roku (NASDAQ:ROKU) Stock Continues to Rise; Is It Time to Book Profit?

Roku (NASDAQ:ROKU) stock continues to rise, growing about 154% year-to-date. This includes yesterday’s gain of 8.48% following the rating upgrade from Cannonball Research analyst Vasily Karasyov. While Karasyov is bullish about ROKU stock and sees further upside, the analysts’ average price target indicates that the current positives are already reflected in the stock’s value. This suggests that now could be the time to book profits. 

Factors Impacting Roku Stock

Roku offers streaming devices, smart TVs, and associated audio devices. It recently delivered better-than-expected Q3 revenue. However, losses widened year-over-year and were higher than the Street’s projection. Nonetheless, the company’s Q4 revenue guidance topped Wall Street’s expectations, suggesting that the rebound in video ads could be sustained in Q4. 

Echoing similar sentiments, Karasyov upgraded Roku to Buy from Hold and expects Roku to benefit from the sustained momentum in the business. The analyst believes that the ongoing momentum in its business indicates that the company could achieve Wall Street’s consensus estimates for Fiscal 2024 and sees room for upside. 

While Karasyov expects Roku to benefit from the momentum in its business, Pivotal Research analyst Jeffrey Wlodarczak believes that at current price levels, ROKU stock appears “reasonably valued.” Wlodarczak upgraded Roku stock to Hold on November 2. 

Is Roku Stock a Buy, Sell, or Hold?

The significant rally in Roku stock and the macro uncertainty keep analysts sidelined on ROKU stock. With 10 Buy, 13 Hold, and two Sell recommendations, Roku has a Hold consensus rating. Further, analysts’ average price target of $86.52 suggests a downside potential of 15.98% from current levels. 

Bottom Line 

Roku will likely benefit from the shift in advertising dollars from linear TVs to connected TVs. In addition, its efforts to lower the cost structure will cushion its earnings. However, macro uncertainty and valuation concerns could restrict the upside potential in Roku stock, as reflected through analysts’ Hold consensus ratings. 

Disclosure

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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