Roku (ROKU) shares rallied 5.7% in the last trading session to close at $74.13. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 24.8% gain over the past four weeks.
Shares of Roku jumped after Wolfe Research analyst upgraded the stock's recommendation from Peer Perform (Hold) to Outperform (Buy), with a price target of $93, citing an improved outlook for the company’s sales growth and profitability. Programmatic advertising initiatives are expected to boost annual revenue growth into the mid-teens, leveraging Roku's increasingly fixed cost structure to generate meaningful free cash flow.
This video streaming company is expected to post quarterly loss of $0.35 per share in its upcoming report, which represents a year-over-year change of +85%. Revenues are expected to be $1.01 billion, up 11.1% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Roku, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on ROKU going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Roku belongs to the Zacks Broadcast Radio and Television industry. Another stock from the same industry, E.W. Scripps (SSP), closed the last trading session 0.6% higher at $1.79. Over the past month, SSP has returned -13.2%.
E.W. Scripps' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.25. Compared to the company's year-ago EPS, this represents a change of +266.7%. E.W. Scripps currently boasts a Zacks Rank of #3 (Hold).
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