Roku Stock Slides as MoffettNathanson Says Estimates are Too High
By Sam Boughedda
Investing.com — Roku Inc (NASDAQ:ROKU) shares weakened more than 9% Wednesday after a downgrade from MoffettNathanson analyst Michael Nathanson.
Nathanson put a sell rating on the stock and a $220 price target, implying around a 20% downside from Tuesday's $276.46 close.
Roku shares are currently trading around the $251.51 mark.
The analyst told investors in a research note that the stock's underperformance provoked them to look closely at the core assumptions in their model.
"Simply put, we think our and the Street's long-term revenue and earnings estimates are just too damn high," commented Nathanson.
"It appears that Roku will need to monetize an absurdly high portion of long-tail AVOD impressions to come even close to Street numbers, which we think will be a challenge given rising competitive pressures in TV OEMs and operating systems," he concluded.
Roku shares have declined over 21.6% for the year to date.
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