Traders Purchase High Volume of Call Options on Roku (NASDAQ:ROKU)

Roku, Inc. (NASDAQ:ROKU) was the target of some unusual options trading activity on Friday. Traders acquired 15,532 call options on the stock. This is an increase of approximately 46% compared to the typical volume of 10,636 call options.

Wall Street Analysts Forecast Growth

ROKU has been the subject of a number of recent analyst reports. Robert W. Baird reiterated a “neutral” rating and set a $160.00 price target on shares of Roku in a research report on Monday, June 15th. Pivotal Research restated a “buy” rating and set a $160.00 price target (up from $140.00) on shares of Roku in a research note on Friday, May 1st. Wells Fargo & Company reaffirmed an “equal weight” rating and issued a $165.00 price objective (down from $167.00) on shares of Roku in a research note on Friday. Oppenheimer cut Roku from an “outperform” rating to a “market perform” rating in a report on Monday, June 15th. Finally, JPMorgan Chase & Co. reiterated a “neutral” rating and set a $160.00 price target (up from $150.00) on shares of Roku in a research note on Tuesday, June 16th. One research analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating and nineteen have given a Hold rating to the stock. According to MarketBeat.com, Roku has a consensus rating of “Hold” and a consensus target price of $156.17.

Roku Trading Up 1.8%

NASDAQ:ROKU traded up $2.77 during mid-day trading on Friday, hitting $156.85. The stock had a trading volume of 871,373 shares, compared to its average volume of 3,653,555. Roku has a twelve month low of $78.53 and a twelve month high of $157.86. The stock has a 50-day simple moving average of $140.49 and a two-hundred day simple moving average of $117.71. The company has a market capitalization of $23.12 billion, a PE ratio of 67.03 and a beta of 2.01.

Roku (NASDAQ:ROKU) last released its quarterly earnings data on Wednesday, August 5th. The company reported $1.08 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.61 by $0.47. The business had revenue of $1.35 billion during the quarter, compared to analysts’ expectations of $1.30 billion. Roku had a net margin of 6.82% and a return on equity of 13.73%. The company’s revenue for the quarter was up 21.9% on a year-over-year basis. During the same period in the previous year, the company earned $0.07 EPS. Sell-side analysts predict that Roku will post 2.82 EPS for the current fiscal year.

Insiders Place Their Bets

In other news, Director Neil D. Hunt sold 2,000 shares of the firm’s stock in a transaction that occurred on Monday, August 3rd. The shares were sold at an average price of $146.25, for a total transaction of $292,500.00. Following the completion of the sale, the director owned 9,629 shares in the company, valued at $1,408,241.25. This trade represents a 17.20% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Matthew C. Banks sold 552 shares of Roku stock in a transaction that occurred on Monday, August 3rd. The shares were sold at an average price of $146.25, for a total transaction of $80,730.00. Following the sale, the chief accounting officer directly owned 6,619 shares in the company, valued at approximately $968,028.75. The trade was a 7.70% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 155,452 shares of company stock worth $20,953,212. 13.45% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Roku

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the business. Jefferies Financial Group Inc. acquired a new stake in shares of Roku in the fourth quarter valued at approximately $1,345,000. Moran Wealth Management LLC purchased a new stake in Roku in the 1st quarter valued at $2,990,000. Contravisory Investment Management Inc. purchased a new stake in Roku in the 2nd quarter valued at $1,184,000. California Public Employees Retirement System boosted its stake in Roku by 14.8% during the 1st quarter. California Public Employees Retirement System now owns 260,774 shares of the company’s stock worth $24,674,000 after purchasing an additional 33,593 shares during the period. Finally, Katamaran Capital LLP grew its position in Roku by 90.8% during the 1st quarter. Katamaran Capital LLP now owns 52,548 shares of the company’s stock worth $4,972,000 after purchasing an additional 25,002 shares during the last quarter. 86.30% of the stock is owned by institutional investors and hedge funds.

Key Roku News

Here are the key news stories impacting Roku this week:

• Positive Sentiment: Unusually heavy call-option activity suggests bullish short-term positioning: traders purchased 15,532 Roku call options, about 46% above typical call volume. However, options activity is speculative and does not guarantee sustained buying.
• Positive Sentiment: Zacks upgraded Roku from “Hold” to “Strong Buy,” adding to momentum following solid earnings and favorable estimate revisions. Zacks upgrade
• Positive Sentiment: Analysts highlighted Roku’s growing connected-TV advertising business, while recent earnings showed revenue growth of 21.9% year over year and earnings substantially above consensus. Roku advertising business growth
• Positive Sentiment: Roku was included in lists of momentum and discretionary stocks benefiting from easing inflation and oil prices, which could support consumer spending and advertising budgets. Discretionary stock recommendation
• Positive Sentiment: The addition of six free live-TV channels may improve Roku’s content offering, engagement and advertising inventory. New Roku live-TV channels
• Neutral Sentiment: Product coverage of an affordable Aurzen Roku smart projector and Roku’s “Gamechangers” programming increases brand visibility, but the direct effect on revenue is unclear. Roku smart projector
• Negative Sentiment: Some commentary argues that Roku’s position as an affordable streaming platform is weakening, raising concerns about competition, consumer value and long-term growth. Roku platform outlook
• Negative Sentiment: Criticism of Roku’s 24/7 AI-generated-content channel could damage perceptions of content quality and the brand, even if the channel creates inexpensive programming and advertising inventory. Roku AI content channel criticism
• Negative Sentiment: A bearish analysis recommends selling alongside insiders and cites debt, execution risks and uncertainty surrounding potential Fox-related synergies. Bearish Roku analysis

Roku Company Profile

Roku, Inc (NASDAQ: ROKU) is a technology company that develops and operates a proprietary streaming platform designed to deliver entertainment content to consumers via internet-connected devices and smart televisions. Since its inception in 2002 in California, Roku has focused on simplifying access to streaming services for viewers worldwide. The company’s platform enables users to discover, access and manage a wide array of over-the-top content from major streaming services, free ad-supported channels and niche providers.

At the core of Roku’s product lineup are a range of streaming players and sticks, which connect to televisions via HDMI and deliver the Roku OS experience.