Shares of Roku (NASDAQ: ROKU) fell 23.2% lower in October 2017, according to data from S&P Global Market Intelligence. Having started its life on the public markets at the very end of September, the young stock had some volatility to shake out of its system.
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The maker of streaming video set-top boxes and operator of related advertising services took a heavy hit in early October, when the freshly minted ticker opened up for options trading and short-selling. The bearish action stabilized for a while, but when the banks underwriting Roku's stock offering exited their lock-up period, the flurry of new analyst ratings were a mixed bag. Therefore, share prices had some more sliding to do.
Now, Roku published its first public earnings report on the evening of Wednesday, Nov. 8 -- and it was a doozy. Top-line sales jumped 40% higher year over year and gross profits nearly doubled. Adjusted net losses stopped at $0.10 per share on revenue of $125 million. Analysts were taken by surprise, having placed their bets closer to a loss of $1.30 per share on sales of $110 million.
Roku shares closed 55% higher the next day, erasing October's entire haircut and then some. Analysts and investors alike have some catching up to do here, and it could take a while before Roku's business model and stock is widely understood.
If you'll excuse me, I've got some financial filings to read. This stock deserves a deeper dive.
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