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Channel Change: Loop Capital Turns Bearish On Roku

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Channel Change: Loop Capital Turns Bearish On Roku

From time to time stocks can go from "expensive to more expensive," with the latest example being Roku Inc (NASDAQ: ROKU), according to Loop Capital.

The Analyst

Loop Capital Markets' Alan Gould downgraded Roku from Hold to Sell with an unchanged $45 price target.

The Thesis

Roku shares have more than doubled in value since the start of 2019 and have now hit an "excessive valuation," Gould said in the Wednesday downgrade note.

While Roku is able to show some of the best unit and revenue growth metrics across the entire high-growth internet and media sector, it will face "substantial potential competition" within the streaming video space, the analyst said. 

A neutral stance can no longer be justified in the face of the following factors, Gould said:

  • Increased insider selling activity. 
  • A Tuesday filing for a mixed shelf offering with an undisclosed size. 

Price Action

Roku shares were falling by 13.3 percent to $61.32 at the time of publication Wednesday. 

Related Links:

Cramer Breaks Down Investing In Streaming Video: Content Is King

Guggenheim Sees Roku Climbing To $77 From Higher Ad Revenue

Photo courtesy of Roku.

Latest Ratings for ROKU

DateFirmActionFromTo
Oct 2019UpgradesSector PerformOutperform
Oct 2019UpgradesNeutralOutperform
Sep 2019MaintainsOutperform

View More Analyst Ratings for ROKU
View the Latest Analyst Ratings

Posted-In: Alan Gould Loop Capital MarketsAnalyst Color Short Ideas Downgrades Price Target Analyst Ratings Trading Ideas Best of Benzinga

 

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