Roku Stock Nears Buy Point In Heavy Volume Trading
Roku Inc Cl A
Roku Inc Cl A
IBD Stock Analysis
- Shares surge past conventional buy point of 463.09 out of cup with handle
- Another buy point at 425 came Thursday when stock broke short downtrend
- Stock is on IBD 50 list and has been added to SwingTrader and Leaderboard
Industry Group Ranking
Cup with Handle
* Not real-time data. All data shown was captured at
1:01PM EDT on
Roku (ROKU) is the IBD Stock Of The Day as the streaming video platform hit a formal buy point ahead of its second-quarter earnings report. Roku stock surged Friday in heavy volume.
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The San Jose, Calif.-based company plans to release its June-quarter results on Aug. 4. Analysts expect Roku to earn 12 cents a share on sales of $618.8 million, according to FactSet. In the year-earlier period, Roku lost 35 cents a share on sales of $356.1 million.
Last week, Roku said it received double the spending commitments from advertisers during this year’s upfront ad sales compared with last year’s season. Advertisers were particularly interested in buying commercials around Roku Originals, including shows that Roku acquired from Quibi.
Roku gets most of its revenue from selling advertising on its platform, including its own Roku Channel. It also sells streaming devices and provides an operating system for smart televisions.
Roku Stock Surges On Friday
In afternoon trading on the stock market today, Roku stock jumped 10.7% to 465.67. Trading volume was well above average. In intraday trading, it climbed as high as 466.64.
Roku stock reached a conventional buy point of 463.09 out of a cup-with-handle base, according to IBD MarketSmith charts. An alternative interpretation sees the base as a double bottom with a handle, although it doesn’t change the buy point.
However, aggressive investors could have picked up shares on Thursday when Roku stock broke above a short downtrend near 425.
Needham analyst Laura Martin recently reiterated her buy rating on Roku stock with a price target of 550.
“Roku is a pure-play way to invest in growth of the U.S. over-the-top and connected-TV ecosystems,” she said in a note to clients. “Roku is a walled garden, so it has best-in-class data about its viewers.”
Hoping For Olympic Boost
Roku is hoping to get an increase in viewers from the Tokyo Summer Olympics, which run starting Friday through Aug. 8.
On Tuesday, it announced a partnership with Comcast‘s (CMCSA) NBCUniversal to bring an immersive Olympic experience to streamers on the Roku Platform. Roku has updated its home screen to promote the games.
Roku said it will offer easy access to NBCUniversal’s 5,500 hours of streaming coverage of the Summer Games directly from its home screen. Also, Roku users will be able to access coverage of the games via the NBC Sports and Peacock channels.
Investor’s Business Daily added Roku stock to its SwingTrader and Leaderboard watchlists on Friday. Roku stock also is on the IBD 50 list.
Roku stock has an IBD Composite Rating of 88 out of 99, according to IBD Stock Checkup. IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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