Streaming Stock Lower After Earnings Whiff

ROKU is poised to test a key area from early November

Deputy Editor
Feb 16, 2024 at 9:12 AM
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Streaming stock Roku Inc (NASDAQ:ROKU) is 17% lower before the bell, following the company's mixed fourth-quarter report. Roku reported adjusted losses of 55 cents per share that fell short of expectations, while revenue of $984 million bested estimates. Roku also forecasted a much weaker first-quarter loss, as it faces off with Netflix (NFLX) and (AMZN) for advertising dollars.

In response, Oppenheimer downgraded ROKU to "perform" from "outperform," while Macquarie cut its price target to $88 from $93, and Rosenblatt Securities raised its price objective to $89 from $76. Coming into today, nine covering brokerages rated the equity a "buy" or better, while the remaining 16 recommended a tepid "hold" or worse.

Poised to open at its lowest level since early November, Roku stock is testing the site of a post-earnings bull gap of 30.7% on Nov. 2. ROKU is also at risk of breaching its 200-day moving average and year-to-date breakeven level.

Options traders have been betting bullishly. Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Roku stock's 50-day call/put volume ratio of 2.72 sits higher than 96% of readings from the last year.


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