MoffettNathanson Turns Bearish On This Streaming Platform

MoffettNathanson Turns Bearish On This Streaming Platform
  • Two analysts slashed price targets on Roku Inc ROKU in quick succession.
  • MoffettNathanson analyst Michael Nathanson downgraded to Sell from Neutral with a price target of $220, down from $330, implying a 20.4% downside. 
  • "Simply put, we think our and the Street's long-term revenue and earnings estimates are just too damn high." 
  • Roku will need to monetize an "absurdly high portion of long-tail" ad-based video on demand impressions to come even close to Street estimates, says the analyst. 
  • Nathanson believes this will be a challenge given the rising competition and sees signs of slowing revenue growth at Roku.
  • Truist analyst Matthew Thornton lowered the PT to $360 from $390, implying a 30.2% upside, and reiterated a Buy after the company's Q3 report. 
  • The analyst said the new price target reflects the short-term supply chain headwind to ad revenue.
  • Price Action: ROKU shares traded lower by 3.60% at $266.51 in the premarket session on the last check Wednesday.

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