The Zacks Consumer Discretionary sector has sailed through rough waters in 2022, down more than 30% and widely lagging behind the general market.
A widely-recognized name in the realm, Roku Inc. ROKU, is on deck to unveil quarterly earnings on November 2nd, after the market close.
Roku is the leading TV streaming platform provider in the United States based on hours streamed, holding partnerships with TV brands including TCL, JVC, Sharp, and others.
Currently, the streaming giant carries a favorable Zacks Rank #2 (Buy) paired with an overall VGM Score of an F.
How does everything stack up heading into the print? Let’s take a closer look.
Share Performance & Valuation
Year-to-date, Roku shares have experienced rough price action, down more than 70% and widely lagging the general market.
Image Source: Zacks Investment Research
Over the last three months, shares haven’t found much relief, down roughly 25% and again underperforming the S&P 500.
Image Source: Zacks Investment Research
The company’s forward price-to-sales ratio has fallen to 2.5X, a fraction of its 9.6X five-year median and nowhere near highs of 25.2X in 2021.
Still, value-focused investors may be steered away from its Value Style Score of an F.
Image Source: Zacks Investment Research
Quarterly Estimates
A singular analyst has lowered their earnings outlook for the quarter, with the Zacks Consensus EPS Estimate of -$1.37 suggesting a Y/Y earnings decline of roughly 380%.
Image Source: Zacks Investment Research
Roku’s top-line is in better standing; the Zacks Consensus Sales Estimate of $699 million indicates an improvement of roughly 2.8% from year-ago quarterly sales of $680 million.
Quarterly Performance & Market Reactions
Roku has struggled to exceed bottom-line estimates as of late, falling short of the Zacks Consensus EPS Estimate in back-to-back quarters. In its latest print, the company fell short of earnings expectations by 5%.
Sales results tell a similar story; Roku has exceeded revenue estimates in just one of its last four quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Additionally, expect shares to be volatile following the release; shares moved downward by a double-digit percentage following its latest print.
Putting Everything Together
Sellers have remained in control of Roku shares in 2022, widely lagging behind the general market.
Valuation multiples have pulled back by a fair margin, but the company’s Value Style Score of an F may steer away value-focused investors.
A singular analyst has lowered their quarterly outlook, with estimates suggesting a downtick in earnings but an uptick in revenue.
Quarterly results have primarily come in under expectations as of late, and shares witnessed a large price swing following its last print.
Heading into the release, Roku ROKU carries a Zacks Rank #2 (Buy) paired with an overall VGM Score of an F.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Roku, Inc. (ROKU) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Add Comment