Roku Stock Plummets on Bleak Forecast, Bear Notes

Ad market performance is cutting into revenue

Deputy Editor
Nov 3, 2022 at 11:13 AM
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Roku Inc (NASDAQ:ROKU) stock is diving to nearly four-year lows after the company's bleak current-quarter forecast. The video streaming name reported third-quarter losses of 88 cents per share on revenue of $761.37 million after the close yesterday, which was better than analysts' expected losses of $1.28 per share on $694.01 million. However, Roku is one of many tech names whose marketing budgets have been hit by inflation and geopolitical tension, with the tough ad market at the center of its lower-than-expected holiday-quarter revenue forecast. 

A host of bear notes is weighing on the shares as well. Both Guggenheim and Rosenblatt Securities downgraded the stock to "neutral" from "buy," while no fewer than eight other analysts lowered their price targets. 

At last glance, ROKU was down 15% to trade at $46.43, and was earlier as low as $44.55. The stock's 80-day moving average has added [pressure to guide the shares to their year-to-date deficit of 80%. 

So far, 51,000 calls and 65,000 puts have crossed the tape, which is nine times the intraday average volume. The weekly 11/4 48-strike call is the most popular, followed by the weekly 11/4 44-strike put, with new positions opening at both. It's also worth noting that Roku stock has landed on the short sell restricted (SSR) list today amid the negative price drop. 


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