Breaking News
0

StockBeat: Roku Shares Clobbered as Analyst Says Sell

Stock MarketsSep 20, 2019 02:04PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

Investing.com - Roku shares were hit hard Friday after a Wall Street analyst rated the stock a sell and slapped it with a $60 price target.

The stock sunk about 20% in afternoon trading.

Roku (NASDAQ:ROKU), which lets users stream content via a set-top box, has been slumping since peaking at $176.55 on Sept. 9. Shares are off 25% this week alone.

It faces competition from the likes of Apple (NASDAQ:AAPL) with Apple +, Netflix (NASDAQ:NFLX), Walt Disney (NYSE:DIS) and others. A big blow came Wednesday when Comcast (NASDAQ:CMCSA) said it would give its Internet subscribers a free set-top box for its Infiniti Flex streaming service.

Friday, Pivotal Research came out with its sell rating and $60 target price, arguing the competition is going to overwhelm Roku. Analyst Jeff Wlodarczak said the stock is overvalued at current levels. His note to clients was titled “Is Roku Broku?,”

Roku was founded in 2002 and became a Wall Street darling when it went public at $14 in September 2017. It has three huge problems.

The stock shot up too far and too fast. The shares were up 476% for this year when they peaked at $176.55 on Sept. 9.

It's showing losses. Operating cash flow, however, is positive, at least through the second quarter.

It's relatively small. While revenue is trending north of $1 billion a year, that's a small number compared with the money Apple (NASDAQ:AAPL), Comcast (NASDAQ:CMCSA), Disney and Netflix (NASDAQ:NFLX) can pour into the streaming space.

In theory, Roku has fans. The consensus target on the stock is $123.20, and 10 of 17 analysts rate the stock a buy. One of the fans, Oppenheimer's Jason Hefstein, boosted his price target to $155 on Friday.

Some 61% of shares are held by big institutions, including Fidelity, Vanguard and Morgan Stanley (NYSE:MS). But the problem with big institutions is they can sell quickly.

StockBeat: Roku Shares Clobbered as Analyst Says Sell
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments
PRAKASH SAHOO
PRAKASH SAHOO Sep 20, 2019 2:35PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
break out above
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email