Roku Inc. (ROKU) Fires Back At Competition, Macquarie Stays At Neutral

Macquarie analyst Tim Nollen reiterated a Neutral rating and $110.00 price target on Roku Inc. (NASDAQ: ROKU) after the company announced 1) new Roku Express ($29.99) is 10% smaller with HD streaming, 2) new Roku Ultra ($99.99) includes improved hardware (quad-core processor,
memory, and wireless), a lost remote finder, an enhanced remote, and JBL headphones, 3) new marketing initiatives with Walmart and Best Buy. Walmart will offer a Roku Express+ for $39.99, an Express with a voice remote, as well as a Roku Ultra LT ($79.99), which is a lighter version of the Ultra. Best Buy will have an exclusive Streaming Stick+ Headphone Edition (HE) with an enhanced voice remote for $59.99.

The analyst stated "Shares closed up 3% on the announcement, but fell ~14% just a day earlier on news from competitors – Facebook announced its Portal TV device featuring OTT streaming functionality, Comcast announced that its Flex OTT thin-client, a Roku like device, will be included free for all broadband-only subscribers and, earlier, Amazon introduced new Fire TV hardware at IFA incl. Europe-focused Amazon Fire TV Edition models. While we see Roku’s devices/OS updates as positive, we believe the upgrades are essential for the company to remain competitive. With an
assumed 1.4x ’20 sales multiple for Player, shares trade at an implied ~13x ’20 Platform Sales vs SaaS peers at 10-11x. We remain Neutral on Roku as we see increasing competition threatening its lead and shares as relatively expensive".

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 $129.30 yesterday.

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