Roku stock dives 25% on weak earnings and financial outlook

Roku (ROKU.US) dropped over 25.0% on Friday  after the streaming service hub posted a wider-than-expected second quarter loss and issued weak financial guidance due to weakening advertising market caused by "uncertainties and volatility in the macro environment."

• The company posted earnings of 82 cents per share and revenues of $764 million, while analysts expected earnings of 69 cents on revenue of 805 million.
• "For the second half of the year, we are forecasting that advertising spend, particularly in the scatter market, will continue to be negatively impacted. We also believe that consumer discretionary spend will continue to moderate, pressuring both Roku TV and Roku player sales," the company told shareholders in a letter released alongside with earnings.  
• JP Morgan lowered ROKU price target to $100.00 from $150.00 citing shrinking demand and not sufficient advertiser base. 
• According to Refinitiv, the company has an average "buy" rating among 32 analysts with a median price target at $120.00.

Roku (ROKU.US) stock fell over 85% from its all-time high from July 2021 and is currently approaching pandemic lows at $57.30, which coincides with lower limit of the wedge formation. Source: xStation5