Market Overview

Roku Falls On Questions Of Tariff Exposure

Roku Falls On Questions Of Tariff Exposure

Roku Inc (NASDAQ: ROKU) lost nearly 7% Tuesday after investors and trades circulated an InvestorPlace article discussing the streaming video company's tariff exposure.

What Happened

Roku was among a handful of companies that made the case against tariffs in Washington, D.C., InvestorPlace's Will Healy wrote.

The streaming video company has a stake in the tariff debate, as its growth prospects could be hampered or Roku may need to explore manufacturing its products in other countries, according to the story. 

Roku depends on China to manufacture its TVs, boxes and dongles. The impact of lower growth amid higher products could impact the stock, which is already up by a factor of five since the end of 2017, according to InvestorPlace. 

Why It's Important

Roku's stock weakness likely "just began" after it peaked at $108 per share and then struggled to hold the $100 level, InvestorPlace said.

The stock also looks to be trading "ahead of its fundamentals" at 13.2 times sales, the publication said. 

What's Next

For the time being at least, there are "no signs" the bull market is ending, according to InvestorPlace.

But if Roku becomes a bigger victim of the Sino-American trade dispute, it is unlikely the current multiple will be able to support itself, the publication said. 

The stock was down 6.78% at $93.25 at the close Tuesday. 

Related Links:

Stephens Downgrades Roku On Valuation, Still Bullish On Long-Term Outlook

Roku Analyst Lifts Price Target By $18, Details 'Valuable' New Ad Offering

Photo courtesy of Roku. 

Posted-In: China InvestorPlace streaming video tariffs trade warNews Global Media Best of Benzinga


Related Articles (ROKU)

View Comments and Join the Discussion!
Lightning Fast
Market News Service
$199 Free 14 Day Trial

McDonald's Hit New All-Time High After Quarter Pounder Update, Bullish Rating

Xero Aggressively Targets Underpenetrated Cloud Accounting Market