Should you invest in Roku as Apple buys spot on remote control?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Jun 30, 2021
  • Roku’s share price gained 4.68% on Wednesday after reports Apple bought a spot on its remote control.
  • The stock is up more than 62% since 6th May amid increased demand for its streaming device.
  • ROKU is yet to retest current 52-week highs of $486.72 reached in February. So, should you invest?

Streaming device company Roku Inc. (NASDAQ:ROKU) is becoming one of the most exciting investments to make in July 2021. On Wednesday, news broke that Apple Inc. (NASDAQ:AAPL) bought a spot in the company’s remote control. ROKU shares popped more than 4.6% to trade at $460.89.

The stock is now up more than 62% since 6th May amid increased demand for its streaming device. ROKU has established itself as a leader in the streaming devices market.

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Roku’s new remote has four buttons, including Apple TV, Netflix, Hulu, and Disney+. The company is capitalizing on the rapid expansion of the video streaming market. 

Content producers like Netflix and Hulu will drive Roku’s future growth. 

Is Roku stock a buy in July 2021?

From a valuation perspective, Roku stock trades at a P/E ratio of 540.47 and a forward P/E of 393.29. The company’s exciting growth outlook has convinced investors to pay a high premium for ROKU shares. 

Analysts expect Roku’s earnings to grow by 72.90% this year before skyrocketing 145% next year. Therefore, investors can look forward to an exciting 12 months ahead. The stock price is likely to rise further amid increased market optimism.

The company reports its fiscal Q2 results on 12th August, making it a more attractive opportunity for buyers in July.

Source – TradingView

Technical overview: why buy ROKU shares in Q3 2021?

Technically, Roku shares have crossed to overbought conditions in the 14-day RSI. The stock price has also surged several levels above the 100-day moving average. Therefore, ROKU could decline slightly in the short term before continuing with the current bull run.

Nonetheless, investors expecting the bull run to continue can target short-term profits at approximately $486.52 or $530.27 long-term. The key support levels are $434.95 short-term and $389.63 long-term.

Bottom line: the catalyst for buying ROKU shares now

Roku’s current bull run could trigger a short-term pullback. However, the outlook remains solid and is attractive to growth investors. The company’s dominance of the streaming devices market will continue to the foreseeable future.

Therefore, buying ROKU shares now could be profitable ahead of its exciting growth in the coming months.

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