ROKU Rebounds After Upbeat Quarterly Report

Analyst sentiment is mixed following the firm's earnings event, however

Deputy Editor
May 7, 2021 at 9:25 AM
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The shares of streaming name Roku Inc (NASDAQ:ROKU) are in rebound mode this morning, handily erasing last night's 6.6% drop and last seen up 11.1% at $315.57. The company announced first-quarter earnings of 54 cents per share, much higher than the 13 cent loss per share expected by analysts. Revenue also topped expectations, while the company shared an upbeat current-quarter forecast. 

Should these gains hold, ROKU could snap an eight-day losing streak -- its longest in over two years. The equity is a ways away from its Feb. 16, all-time high of $486.72 still, pressured lower by its 60-day moving average in April, though it sports a year-over-year lead of over 122%. 

Analysts have chimed in on Roku's results, but sentiment is mixed. No less than four members of the brokerage bunch slashed their price targets, including Pivotal Research all the way down to $350. Evercore ISI, meanwhile, hiked its price target to $430 from $400. 

Most brokerage firms covering ROKU are bullish, with 15 analysts calling the security a "buy" or better, compared to only three "hold" or worse ratings. Plus, the 12-month consensus price target of $465.06 is a 48.7% premium to last night's close.

Short interest, meanwhile, has been on the rise. In the last two reporting periods, short interest rose 16.5%. There's still plenty of room on the bearish bandwagon, however, with the 3.61 million shares sold short making up only 4.4% of the stock's available float, or a little under one day of pent-up buying power at ROKU's average pace of trading. 

What's more, the equity's Schaeffer's Volatility Scorecard (SVS) sits at 94 out of a possible 100. This means Roku stock has managed to exceed volatility expectations during the past year -- a boon for option buyers. 

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