Roku Stock Falls 25% After Disappointing Revenue, Guidance

No less than 11 analysts have issued price-target cuts

Deputy Editor
Feb 18, 2022 at 10:18 AM
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The shares of Roku Inc (NASDAQ:ROKU) are spiraling this morning, last seen down 25.1% at $108.37 after the streaming company's mixed earnings report. Roku posted earnings that beat analysts' estimates, though its revenue fell short of expectations. Revenue also saw slimmer growth during its fourth quarter compared to the last two quarters, while it's current-quarter revenue forecast also missed the mark. 

Analysts were quick to move in with bear notes. No less than 11 slashed their price targets, including Moffett Nathanson all the way to $100 from $135. More bearish analyst attention could be on the way. Heading into today, 18 of the 23 in coverage called the stock a "buy" or better, compared to two "hold," and three "strong sell" ratings. Plus, the 12-month consensus price target of $246.39 is a 126% premium to current levels. 

The stock gapped to its lowest level since September 2020 right out of the gate today, an area that marked a correction from the rebound ROKU staged off its pandemic-related rout. The past six months haven't been easy for the equity, which has lost almost 70% in that time period, with the 30-day moving average leading shares further and further away from their late-August highs near the $490 level. 

Options bears are likely celebrating today, seeing as long puts haven't been more popular during the past year. This is per Roku stock's 10-day put/call volume ratio of 1.00 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than all other readings in its annual range. 

This penchant for puts is carrying over into today's trading. So far, 86,000 puts have been exchanged, compared to 58,000 calls, with overall volume running at 15 times the intraday average and in the top-most percentile of its 12-month range. By far, the most popular position is the February 100 put, which expires this evening, with positions being sold to open here. followed by the weekly 2/25 100-strike put where positions are also being sold to open. 

 




 
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