Roku Inc's (ROKU) Quibi Acquisition Hints at Large Upcoming Content Investments - MofettNathanson

MoffettNathanson analyst Michael Nathanson reiterated a Neutral rating and $360.00 price target on Roku Inc. (NASDAQ: ROKU) noting that the company is in the process of evolving from simply being a gateway business that enables access to the streaming world (like AOL in the earliest days of the internet) into a multi-media company that monetizes its customer base increasingly through the development of the Roku Channel.

The analyst stated "we believe that Roku will have to “ladder up” into original content (à la Netflix) and
away from commoditized library content. The acquisition of Quibi’s nascent library is the first step. This pivot will be expensive, filled with more execution risk and is not factored into our forecasts. When a company sells stock for “working capital and general corporate purposes” and when that company’s management team unloads their shares shortly after reporting earnings, it is a pretty good sign that the company believes their shares are over-valued or that the market is under-estimating some challenges along the way. We think the challenge is the long-term competiveness of the Roku Channel and Roku’s ability to continue to drive ad
impressions."

For an analyst ratings summary and ratings history on Roku Inc. click here. For more ratings news on Roku Inc. click here.

Shares of Roku Inc. closed at $345.00 yesterday.

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