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 Amazon.com (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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