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Roku Stock Surges After Guggenheim Upgrade: A Detailed AnalysisRoku Inc. (NASDAQ: NASDAQ:ROKU ) experienced a significant boost in its stock price, jumping 11.78% in Friday's trading session. This surge followed an upgrade from Guggenheim Securities, which raised its rating on the stock from "Neutral" to "Buy" and set a new price target of $75. This upgrade has sparked renewed interest in Roku, a company that has been at the forefront of the streaming industry but has faced challenges in recent months.
Guggenheim's Optimism: A Bright Spot Amidst Mixed Analyst Ratings
Guggenheim's upgrade is based on their positive outlook for Roku's ability to expand its video inventory ad sales through third-party platforms and enhance home screen monetization. These efforts, they believe, will drive significant revenue growth into 2025. The new $75 price target represents a potential upside of 21.4% from Roku's current trading price, making it an attractive opportunity for investors looking for growth in the tech sector.
However, it’s important to note that not all analysts share Guggenheim's optimism. Citi recently lowered its price target for Roku (NASDAQ: NASDAQ:ROKU ) to $60 from $70, maintaining a "Neutral" rating. This downgrade reflects concerns about the broader streaming industry's challenges, despite Roku’s strong Q2 earnings report. Pivotal Research, Macquarie, and JPMorgan have also revised their targets, setting them at $65, $72, and $80, respectively. These mixed ratings highlight the uncertainty surrounding Roku's future performance.
Roku's Q2 Earnings: A Mixed Bag
Roku's Q2 2024 earnings report was a mixed bag. The company reported revenue of $968.2 million, a 14.3% year-over-year increase that surpassed expectations by over $30 million. Platform revenue, which includes advertising, rose by 11% to $824 million. Additionally, Roku (NASDAQ: NASDAQ:ROKU ) added 2 million new streaming households, bringing its total to 83.6 million. Streaming hours also saw a 20% increase, reaching 30.1 billion.
Despite these positive figures, Roku's average revenue per user (ARPU) remained flat at $40.68, signaling ongoing challenges in monetizing its expanding user base. This flat ARPU has raised concerns among investors and analysts about the company’s ability to sustain growth, particularly in an increasingly competitive streaming market.
Fundamentals and Valuation: Is Roku a Buy?
Roku's fundamentals present a compelling case for investors, especially those with a bullish outlook. The company has recently adopted Unified ID 2.0, an advanced identity solution expected to enhance its ad-targeting capabilities. Additionally, Roku is expanding its advertising ecosystem through partnerships with platforms like The Trade Desk, diversifying its ad revenue streams.
Despite these positive developments, Roku (NASDAQ: NASDAQ:ROKU ) still faces significant headwinds. Inflationary pressures and potential changes in consumer spending patterns could impact its ability to sustain growth. However, the company’s valuation metrics indicate that the stock is trading at a relatively low multiple compared to its historical averages. Roku’s price-to-sales ratio is currently around 2.36x TTM, suggesting that the stock is reasonably priced for bullish investors to build a position.
Moreover, Roku's financial position remains strong, with $2.1 billion in cash and equivalents and no significant debt. The company continues to generate solid free cash flow, standing at $318 million on a trailing 12-month basis. Guggenheim’s analysts believe that Roku’s disciplined execution and strategic focus on monetization will eventually reflect in its stock price, making it a potentially lucrative investment at current levels.
Technical Analysis: The Support and Resistance Levels
From a technical perspective, Roku's stock has seen a rollercoaster ride over the past few years. The stock has plummeted from its highs above $400 in 2021, and despite a brief recovery in 2023, it has struggled to maintain momentum, recently falling to $50.
Currently, the stock is trading near a key support level at $60.2, which could provide a solid entry point for bullish investors. On the upside, resistance lies above $67.7. Investors with a bullish outlook may consider initiating a small position at current levels, with a stop loss below the support level. Conversely, those with a bearish outlook could consider shorting the stock near the resistance level, with a stop loss at $70.
Conclusion: Is Roku a Good Investment?
Roku’s future remains uncertain, with mixed signals from analysts and significant challenges ahead. However, the company's strong Q2 earnings, strategic initiatives in advertising, and solid financial position suggest that it has the potential to rebound. For investors with a long-term perspective, Roku (NASDAQ: NASDAQ:ROKU ) could be an attractive opportunity, particularly if the company continues to execute its growth strategy effectively.
Whether you’re bullish or bearish on Roku (NASDAQ: NASDAQ:ROKU ), it’s clear that the company remains a key player in the streaming industry, and its stock is one to watch closely in the coming months.
Roku Test with Destiny A 2 year Support trendline A Buy?Hi Guys. So i am always on the lookout for Macro trend setups, signs and opportunities. I believe ROKU is potentially in a position to take a nice swing.
This analysis is on 1 day.
Notice we have reached a Sloping Support trendline from December 2022.
We've had 2 touches previous that resulted in bounces.
Trendline theory states trendlines can stay intact for atleast 3 touch points.
Owing to the idea that our recent touch point is a solid area to take positions. Has a decent probability of a bounce.
On top of that we have the Blue horizontal trendline, which acts as an added layer of Support.
Incase the black trendline does not hold, this would be next lvl.
Stop loss/limit should be placed below trendlines based on risk tolerance. Small positions can have a larger % loss, vise versa.
Now to Support my theory of this buying a solid area to take positions.
I have 3 indicators.
RSI which is in Oversold conditions after 3+ months.
On top of that the momentum indicators MACD and STOCH. Are also oversold.
MACD is signaling a waning bearish momentum. As seen by the light red histobar prints.
We are looking for and eventually should see Green bars and a bullish cross. Which can bring in necessary demand we need for bounce.
Also STOCH RSI is below the 20 lvl, but crossing Bullish as we speak.
This must continue and a bullish cross ABOVE 20 lvl, will also bring in demand and help with bounce.
If we see bullish changes in the momentum indicaotrs, i believe there would be a even higher probability of prices bouncing.
So pay attention, be diligent and manage risk accordingly.
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ROKU Support Bounce We see that NASDAQ:ROKU has started to bottom after earnings. The yellow circles below show that when the RSI has bottomed price has then risen. We also have a gap to fill after earnings and we are right on the trend line up.
I like shares down here along with some cash covered puts at about the $60 strike,
Roku, Inc. (NASDAQ: ROKU) Roku Shares Jumped 30% Roku Inc. (ROKU) shares spiked by more than 30% today after the streaming device and TV maker reported earnings results well ahead of analyst predictions for the third quarter alongside strong subscriber growth.
For the third quarter, Roku achieved an all-time high of 75.8 million active accounts, a net increase of 16% compared with the prior-year quarter. This represents a net increase of 2.3 million accounts over the second quarter of this year. Analysts had expected active accounts to reach 75.3 million for the third quarter. Roku's revenue growth also outpaced analyst estimates. The company reported a 20% year-over-year increase, reaching $912 million for the quarter, against predictions of $855 million.
Roku said the better-than-expected revenue improvement was driven by "strong performance in content distribution and video advertising." The company's Roku TV line, which launched in March, also contributed to revenue gains and helped to drive net active account additions.
Roku's net losses widened significantly, to $330.1 million for the quarter compared to $122.2 million in the prior-year quarter. Losses per share nearly tripled to $2.33.
Price Momentum
ROKU is trading in the middle of its 52-week range and above its 200-day simple moving average.
What does this mean?
Investors are still evaluating the share price, but the stock still appears to have some upward momentum. This is a positive sign for the stock's future value.
ROKU to 110This trade is a bullish-long term trade
ROKU has been going down since the pandemia.
However, when you analyze in terms of fundamental and technical analysis, it is a good stock to have in your portfolio because the chance that has to go up!
ROKU has a lot of value in MOATs.
ENTRANCE= at or above 74.78
Afther we enter, it can go to 115 in a couple of weeks.
SL= 51.66
If you already have this stock, I recommend u to hold it!
ROKU Long IdeaBuy Roku low and sell it high.
Roku is presently sitting at the near bottom of the recent volume profile
and above the POC line for support. On the 15-minute chart, levels are
marked out for a stop loss and a three-tiered take profit. This will be about
a 15% upside depending on the proportions of the take-profits.
ROKU Inc Options Ahead of EarningsIf you haven`t shorted the Double Top Bearish Chart Pattern:
or the Q2 earnings:
then you should know that looking at the ROKU Inc options chain, i would buy the $50 strike price Puts with
2022-11-4 expiration date for about
$3.35 premium.
If the options turn out to be profitable Before the earnings release, i would sell at least 50%.
Looking forward to read your opinion about it.
ROKU WOLFE WAVE SETUP OVER THE WEEKENDThere is a wolfe wave setup on the 78 min time frame (ah=on) . The projected target is calculated by extending a linear line between pivot 1 and 4 and projecting the line. This is represented as the green perforated line, as shown in the chart. The projected target is approx 75 which is expected to reach this price target before Sept 16. Projected targets are defined by identifying the apex of the wolfe wave and projecting a vertical line toward the green perforated projection tgt which is extending from left to right. Using the customizable gap finder indicator there are sets of gaps along the way toward up to 80.
ROKU Wolfe Wave Daily SetupOn June 15, Roku triggered a BUY entry using the wolfe wave daily setup. This wolfe wave setup has two major moving averages that are potential targets 21 day ma and 50 day ma. In addition, ROKU is squeezing on the daily time frame. So if the markets open Tuesday green, then ROKU has a shot of moving approx 11%. If the squeeze triggers long and the momentum picks up such that the momentum histogram bars cross up and above the zero line the the momentum should stick with ROKU and achieve the wolfe wave tgt of 116 before Aug 9.
ROKU - Falling Wedge Breakout + Bull FlagWeekly Timeframe:
Strong Hidden Bullish Divergence
"Batman" Pattern
Major volume spike at $100 bottom, aligning with previous support areas
Daily Timeframe:
Broke out of a Falling Wedge
Bounced at an RSI-based supply zone
Formed Bull Flag just under supply zone and volume shelf
65m Timeframe:
Bull Flag under supply zone
Rejected Trendline formed from March 15th bottom
Volume and flow suggesting short term bullish sentiment
I expect a bounce for the severely beaten-down stock. Whether it will be a full revival to all-time highs, I cannot say, though I am quite doubtful. Playing the short term bounce. I am leaning bullish, but will stay neutral and watch price action.
With a breakout from the bull flag:
PT1: $136
PT2: $140
PT3: $142
PT4 (Stretch): $148
Failing the trendline would invalidate this setup and could be cause for puts.
Roku Analysis 09.02.2022Hello Traders,
welcome to this free and educational analysis.
I am going to explain where I think this asset is going to go over the next few days and weeks and where I would look for trading opportunities.
If you have any questions or suggestions which asset I should analyse tomorrow, please leave a comment below.
I will personally reply to every single comment!
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Thank you for watching and I will see you tomorrow!
ROKU - Confluence zone (opportunity for bargain hunters)???Confluence includes:
Fib Extention and projection cluster zone
Diagonal and horizontal support confluence
Divergence building
Price fell 70% from High
While I feel there is a lot of competition in the field ROKU is playing in and longer-term they may have harder times, there is a potential that market bargain hunters jump in at these levels, the key will be to wait for a confirmation trigger confirmed by price action on a smaller time frame.
Market volatility is very high and the fact that this potential trade is against the trend dictates being very nimble.