Roku, Inc. (ROKU) downfall fuelled by Comcast (CMCSA)

Roku, Inc. (ROKU) has received an average target price from analysts of 133.07 amounting to a recommendation rating of Overweight. That comes from 16 different analysts. Perhaps, the driver for that assessment comes from the company’s valuations. 

To give a sense of trend, the same data point on the estimate for next year is currently sitting at N/A times earnings. Drilling down a bit further, this quarter, we are looking at an average estimate from analysts for earnings per share level of 15.00. That shift to 14.00 heading into next quarter.

RokuInc. engages in the provision of a streaming platform for television. It operates through the following business segments: Player and Platform. The Player segment consists of net sales of streaming media players and accessories through retailers and distributorsas well as directly to customers through the company’s website. Its Roku platform allows users to personalize their content selection with cable television replacement offerings and other streaming services that suit their budget and needs. Its product categories include advertisingRoku TVs and Streaming Players. The company was founded by Anthony J. Wood in October 2002 and is headquartered in Los GatosCA.
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Stock of Roku, Inc. (ROKU) last opened at $143.60 and traded at $127.90 x 1000. More than 38,239,045 shares exchanged hands compared to an average daily volume of 11,281,271 shares. At the current pps, the market capitalization stands at 15.096B.

Investors try to use stocks with high beta values to quickly recoup their investments after sharp market losses. Roku, Inc. (ROKU) currently has a Beta value of 1.62 . Beta is a measurement of a stock’s price fluctuations, which is often called volatility and is used by investors to gauge how quickly a stock’s price will rise or fall. A stock with a beta of greater than 1.0 is riskier and has greater price fluctuations, while stocks with beta values of less than 1.0 are steadier and generally larger companies. Beta is often measured against the S&P; 500 index. An S&P; 500 stock with a beta of 2.0 produced a 20 percent increase in returns during a period of time when the S&P; 500 Index grew only 10 percent. This same measurement also means the stock would lose 20 percent when the market dropped by only 10 percent.

While we have already looked at Roku, Inc beta and P/E ratio, the EPS cannot be ignored. Roku, Inc EPS for the trailing twelve months was -0.20. Traders and investors often use earnings per share (TTM) to determine a company’s profitability for the past year. So in essence, EPS is the amount of a company’s net income per share of common stock. Earnings per share equal the company’s net income less any dividends paid on preferred stock divided by the weighted average number of common stock shares outstanding during the year. Roku, Inc is estimated to release its next earnings report on Nov 5, 2019 – Nov 11, 2019. It would be interesting to see how the earnings fair out considering the recent developments.

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