Market Overview

Citi Maintains Sell Rating On Roku, But Expects Positive Q4 Surprise

Share:
Citi Maintains Sell Rating On Roku, But Expects Positive Q4 Surprise
Related ROKU
Analysts Stick With Bullish Roku Stances After Concerning Chinese Headline
Roku Under Selling Pressure Amid Report TCL Is Shifting Its Business

Roku Inc (NASDAQ: ROKU) reported its third-quarter results in early November, sending shares soaring higher by more than 50 percent. Heading into the company's fourth-quarter report Wednesday, investors could be treated to another surprise — but this isn't reason enough to buy the stock, according to Citi.

The Analyst

Citi's Mark May maintains a Sell rating on Roku's stock with an unchanged $28 price target.

The Thesis

Similar to Roku's Q3 report, the company could report upside to consensus estimates, which would push the stock higher, May said in a note. (See the analyst's track record here.) 

Upside in Q4 would likely come from the advertising business, which remains small at $200 million per year — and management's guidance for the quarter was conservative, May said. 

But Roku's current stock valuation already assumes an "overly optimistic" long-term view of the potential of its advertising business, he said.The analyst said he's adding Roku's stock to Citi's "Positive Catalyst Watch list," but also maintaining a Sell rating on the stock.

Price Action

Shares of Roku were trading higher by more than 6 percent Tuesday afternoon at $51.11. 

Related Links:

Roku Analyst Warns Short Sellers To Close Their Positions

Consumer Reports Says Roku Smart TVs Hackable; Company Disputes

Photo courtesy of Roku. 

Latest Ratings for ROKU

DateFirmActionFromTo
Dec 2018DA DavidsonUpgradesNeutralBuy
Nov 2018Morgan StanleyMaintainsEqual-WeightEqual-Weight
Nov 2018WedbushUpgradesNeutralOutperform

View More Analyst Ratings for ROKU
View the Latest Analyst Ratings

Posted-In: advertising Citi Mark May streaming videoAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

Related Articles (ROKU)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
DLTRBernsteinUpgrades0.0
CNPUBSUpgrades34.0
UGIUBSDowngrades63.0
ATOUBSDowngrades106.0
CSCONomuraDowngrades50.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Mid-Afternoon Market Update: DineEquity Rises Following Strong Q4 Results; MiMedx Shares Plunge

Xerox, Icahn And Deason Continue To Squabble Over Fujifilm Deal