Roku earns 5th downgrade in November as KeyBanc cuts on 'too optimistic' consensus

November 29, 2022 9:14 AM EST
Get Alerts ROKU Hot Sheet
Price: $52.58 --0%

Rating Summary:
    15 Buy, 12 Hold, 7 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 19 | New: 16
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KeyBanc analyst Justin Patterson downgraded Roku (NASDAQ: ROKU) shares to Sector Weight from Overweight. The downgrade reflects lowered 2022E, 2023E, and 2024E revenue estimates by 1%, 16%, and 20%, respectively.

Patterson cited three key reasons why he moved to the sidelines on Roku stock.

  1. Roku is clearly losing share in connected TV (CTV) ad dollars;
  2. The Company is between a rock and a hard place on investment; and
  3. Estimates do not fully contemplate Roku's challenges.

“We expect Roku growth likely remains sub-seasonal in 1H23E, which makes it difficult to envision revenue growth in 2023E or EBITDA profitability in 2024E,” Patterson added.

KeyBanc moving lower on the rating scale marks the 5th downgrade for Roku in November only and the 11th since July.

As of 09:10 EST (14:10 GMT), Roku shares are down more than 4.2% in pre-market Tuesday. Shares are down over 76% year-to-date (YTD).

By Senad Karaahmetovic

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KeyBanc, Senad Karaahmetovic