All You Need to Know About Roku (ROKU) Rating Upgrade to Buy

Core Viewpoint - Roku has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates in determining stock price movements, as institutional investors often base their valuations on these estimates [4][6]. - For Roku, the increase in earnings estimates indicates an improvement in the company's underlying business, which is expected to drive the stock price higher [5][8]. Zacks Rating System - The Zacks Rank stock-rating system categorizes stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7][9]. - The upgrade of Roku to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10][11]. Earnings Estimate Revisions for Roku - For the fiscal year ending December 2024, Roku is expected to earn -$1.10 per share, reflecting a 78% change from the previous year's reported number, with a 24.4% increase in the Zacks Consensus Estimate over the past three months [8].