Roku Technical Rating Climbs Following Long String Of Revenue, Profit Gains

Streaming video was hot before the pandemic. And the work-from-home, play-at-home situation added still more steam to the trend. On Wednesday, highly rated Roku (ROKU) reached an important technical milestone, seeing its Relative Strength (RS) Rating jump into the 90-plus percentile with an improvement to 92, up from 89 the day before.


The 92 Relative Strength Rating means that Roku is outperforming 92% of all stocks. Decades of market research reveals that the stocks that go on to make the biggest gains often have an RS Rating of at least 80 as they begin their largest climbs.

Recent All-Time High For Roku

Roku develops streaming video devices for various companies, including co-branded TVs, and for retail sale. Roku also operates its own streaming video network. Its stock hit an all-time high at 486.72 on Feb. 16 and consolidated amid the tech sell-off. It dropped to 306.82 on March 26 and in the last two weeks since then has risen. It closed at 361.92 Wednesday.

Among its other technical ratings, San Jose, Calif-based Roku has an 84 Composite Rating. The IBD Composite Rating helps investors easily measure the quality of a stock’s fundamental and technical metrics. The best growth stocks have a CR of 90 or better.

The company’s relative strength line, which compares a stock’s performance with the broad S&P 500, has risen lately. It hit an all time high in February and dipped a bit after that.

In terms of fundamentals, in its most recent quarter, Roku saw its earnings soar 476% year over year, to 49 cents a share. That came on the heels of a 141% increase the prior quarter.

Revenue last quarter grew 58% to $640.9 million. The prior three periods its revenue grew 55%, 42% and 73%.

The company is expected to report its latest performance numbers on or around May 7.

Other Group Leaders

Roku earns the No. 2 rank among its peers in the Leisure-Movies & Related industry group. Netflix (NFLX) is No. 1 and Lions Gate Entertainment (LGFA) is No. 3

See How IBD Helps You Make More Money In Stocks

Roku is now considered extended and out of buy range after clearing a 74.45 buy point in a first-stage consolidation. See if the stock forms a new pattern or follow-on buying opportunity like a three-weeks tight or pullback to the 50-day or 10-week line.

As you try to find the best stocks to buy and watch, keep a close on eye on relative price strength. This exclusive rating from Investor’s Business Daily identifies share price performance with a 1 (worst) to 99 (best) score. The score shows how a stock’s price behavior over the last 52 weeks holds up against all the other stocks in our database.


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