Skip to content

Roku drops by 25% in after-hours trading due to Q2 earnings miss

Roku drops by 25% in after-hours trading due to Q2 earnings miss
Dino Kurbegovic

Roku (NASDAQ: ROKU) sunk by 25% in after-hours trading on July 28, following a miss on their Q2 earnings report. A slowdown in TV advertising spending due to various macro headwinds spooked investors who fled the stock. 

The company posted $764.4 million in revenue, growing by 18.5% year-on-year (YoY), while analysts expected a 25% growth; thus missing estimates by $40.2 million. Further, the earnings per share (EPS) was -$0.82, missing estimates by $0.13. Other highlights included platform revenue rising by 26% YoY to $673 million and gross profit being up by 5% YoY. 

“Consumers began to moderate discretionary spend, and advertisers significantly curtailed spend in the ad scatter market (TV ads bought during the quarter). We expect these challenges to continue in the near term as economic concerns pressure markets worldwide,” the company said.

ROKU chart and analysis 

Both the short-term and long-term trends for ROKU are negative as the stock traded between $64.25 and $97.93 over the past month. The after-hours move has also pushed the stock far below all daily Simple Moving Averages (SMAs), on increased trading volume.  

At the moment, the resistance is at $69, while support is located at $60.58.  

ROKU 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

Presently, analysts rate the shares as a moderate buy, seeing the average price in the next 12 months reaching $124.19, 45.81% higher than the current trading price of $85.17.

Wall Street analysts’ price targets for ROKU. Source: TipRanks  

Some of the metrics Roku showed investors indicated that the company is still growing, for example, the firm added 1.8 million incremental active accounts, reaching a total number of 63.1 million. However, streaming hours fell by 0.2 billion compared to the last quarter, but still, Roku totaled 20.7 billion streaming hours. 

While investors digest the numbers the company showed, and get to grips with what the slowing ad spending will mean for the future of the company, market participants can expect more volatility for ROKU in the short term.

Buy stocks now with Interactive Brokers – the most advanced investment platform


Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in 70+ cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

Read Next:

Weekly Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Disclaimer: The information on this website is for general informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. This site does not make any financial promotions, and all content is strictly informational. By using this site, you agree to our full disclaimer and terms of use. For more information, please read our complete Global Disclaimer.