Morgan Stanley Sees Roku Inc. (ROKU) Growth Peaking in 2Q21
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Morgan Stanley analyst Benjamin Swinburne reiterated an Underweight rating and $275.00 price target on Roku Inc. (NASDAQ: ROKU) noting that growth should peak in 2Q21. The analyst downgraded ROKU shares to UW in December 2019, noting that Platform gross profit was slowing. He expected the slowdown to drive multiple compression while COVID driven disruption to the ad market, led to a pull forward of streaming demand by the consumer.
The analyst stated "We continue to see Roku as a leader in streaming TV distribution. However, at nearly 40x EV / '21E gross profit, shares are pricing in a dominant market position while we see a fragmented and highly competitive distribution landscape today and in the future".
Shares of Roku Inc. closed at $335.31 yesterday.
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