Roku Is Up By 6%, Here Is Why
Key Insights
- Apple Music becomes available on the Roku Platform.
- Meanwhile, analyst estimates keep moving lower, which is bearish for Roku stock.
- The stock will need additional positive catalysts to break the current downside trend.
Roku Stock Rallies After Apple Music Appears On The Roku Platform
Shares of Roku gained strong upside momentum after the company announced that Apple Music app would be available globally on the Roku platform.
Roku stock has been under strong pressure this year as the company’s internal problems and the general sell-off in high-PE triggered a huge pullback.
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The company has recently released its first-quarter report, reporting revenue of $734 million and a GAAP loss of $0.19 per share. In the report, Roku highlighted ongoing supply chain issues. While the results were not impressive, the stock managed to stabilize and is trying to develop additional upside momentum.
What’s Next For Roku Stock?
Analysts expect that Roku will report a loss of $1.3 per share in the current year and a loss of $0.23 per share in the next year, so the company is not expected to be profitable in anytime soon.
It should be noted that analyst estimates have been moving lower in recent months. Just a few weeks ago, analysts expected that Roku would be able to report a profit in 2023, but the outlook has changed.
It remains to be seen whether recent news will be able to change the market sentiment towards Roku stock. S&P 500 is trading at yearly lows, and traders continue to move out of riskier assets, which is bearish for Roku stock and other growth stocks. In addition, earnings estimates keep moving lower. At this point, it looks that Roku stock will need more positive catalysts to break the current downside trend.
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