Roku Inc. shares are off 2.2% in premarket trading Tuesday after the company disclosed that selling stockholders would be reselling up to 571,459 shares due to an agreement reached when Roku announced its plans to acquire advertising-tech company Dataxu. That deal closed on Nov. 8. The selling stockholders listed in Roku's Monday afternoon filing are investment funds affiliated with Thomvest Ventures, offering Class A 150,281 shares, funds affiliated with Menlo Ventures, offering 130,107 shares, and funds affiliated with Flybridge Capital, offering 62,473 shares. Sky Ventures Limited will offer 94,398 shares, Atlas Venture Fund VIII will offer 57,707 shares, and other selling stockholders will offer 76,493 shares. Roku's stock has risen 423% so far this year as the S&P 500 has increased 25%.
The company's “secular story” is still intact, Rosenblatt Securities says.
Roku reported an adjusted third-quarter loss of 22 cents a share, better than the loss of 28 cents that Wall Street expected.
U.S. stock futures are up because the U.S. and China are making progress on trade. That’s not enough for Roku or Expedia shares, which are dropping in premarket trading. Shares of Qualcomm and Fiserv, on the other hand, are moving higher.
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Most analysts say Roku stock is a buy.
Roku Inc. shares rose 7% Monday, after BofA Merrill Lynch analysts started coverage of the stock with a buy rating and said the company should benefit from growing competition in the streaming space. Analysts led by Ziv Israel set a stock price target of $154, or about 8% above its current trading level. "While known primarily for selling streaming hardware, Roku has effectively shifted to generating the majority of revs through monetizing its user base, primarily through video ads," the analysts wrote in a note to clients. Expectations that a slew of new competitors that are launching streaming services in the near and medium term will have a negative impact on Roku are overdone, they wrote. The analysts are expecting the company's strong platform revenue growth to continue as advertisers switch to over-the-top services and Roku should also benefit from demand for affordable smart TVs, enabled by its Roku TV operating system. The company still enjoys strong brand recognition and is benefiting from demand for services like Netflix , Disney+ , HBO and Amazon Prime Video , they wrote. Pending competition from Comcast Corp. and Facebook is also overdone, they said. "We view the market reaction as excessively punitive, as total cost of ownership for both products is significantly higher than for the Roku device.," said the note. "Furthermore, Roku's TV OS is the most significant driver of account generation, reducing the importance of device sales to its growth trajectory." Roku shares have gained 369% in 2019, while the S&P 500 has gained about 21%.
Bank of America Merrill Lynch says Roku actually benefits from rising competition, and that the market has been too hard on the stock.
Walt Disney reported a 34% jump in revenue in the latest quarter, boosted by its studio division, which benefited from the box-office performance of “The Lion King,” “Toy Story 4” and “Aladdin.”
U.S. stocks climbed after China said Beijing and Washington agreed to lift some existing tariffs if a deal is struck, signaling that trade talks are progressing.
The richly valued stock is vulnerable to perceived—and real—competitive threats.
Fox Corp. said its quarterly revenue rose 5%, boosted by strong growth at its television unit and higher proceeds from its Los Angeles studio lot, which the company is leasing to rivals.
Sony plans to end its PlayStation Vue streaming television service early next year due to intensifying competition.
Bipartisan House lawmakers discuss funding an investigative unit in Kyiv’s military to root out corruption, Arizona GOP worries about senator’s fundraising, and more in Washington Wire.
Amazon and Walt Disney are in a dispute over terms governing Disney apps carried on Amazon’s Fire TV streaming-video player.
Facebook, Toronto Dominion Bank, Roku and Fitbit are some of the companies with shares expected to trade actively in Monday’s session.
Facebook is getting into the streaming game, launching a new set-top version of its Portal device that adds to the company’s bet that the future of smart homes will be social.
Companies with shares expected to trade actively in Wednesday’s session include Exxon Mobil, McDonald’s, Roku and GameStop.
Some companies want to keep their share surge going endlessly, and sometimes share sales come into the mix.
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Roku, Inc. 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 distributors, as 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 advertising, Roku TVs and Streaming Players. The company was founded by Anthony J. Wood in October 2002 and is headquartered in Los Gatos, CA. (See Full Profile)