Roku Plunges 23% After Missing Earnings

Shares of Roku closed down 23% on Friday, a day after the company reported second-quarter earnings that missed both top and bottom-line estimates.

Revenues of $764 million and earnings losses of 82 cents per share, both below consensus forecasts, were reported by the company.

In addition, Roku released third-quarter guidance that was $200 million below expectations and announced it was revoking its full-year growth forecast.

Roku blamed the loss on challenging macroeconomic factors like inflation and supply chain issues that could hinder the sales of Roku TV and other devices.

It also issued a warning that the strain brought on by the slump in the advertising industry might not abate.

Susquehanna cut its price target for Roku shares from $200 to $70 and downgraded the stock to neutral on Friday.

Recently, bad second-quarter results were also reported by other technology companies that heavily rely on the advertising sector.

For instance, both Snap and Twitter reported bad financial results, and Meta cited macroeconomic factors and a "weak advertising demand environment" as the reasons for its poor financial performance.