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Roku Stock Dips as Analyst Downgrades to Sell After 'Awful' Results

Stock Markets Aug 08, 2022 08:34
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By Senad Karaahmetovic

Shares of Roku (NASDAQ:ROKU) are down about 2% after a Pivotal Research analyst cut the rating to Sell from Hold with a $60 per share price target.

The analyst made a downgrade call after “awful 2Q results/3Q guidance” with Roku increasing costs at the wrong moment.

“Management ramped expenses dramatically into what we believe will be a ’23 recession which is likely to lead to lower than consensus revenue growth and larger losses through ’23 and possibly ’24 depending on the length of what we view as an inevitable recession,” the Pivotal analyst said in a client note.

Pivotal Research’s base case scenario calls for a hard landing as they continue to forecast that core inflation is “likely to be higher for longer and force the fed to raise more aggressively leading to a stagflationary environment in ’23.”

Hence, ROKU stock is cut to Sell with a downside risk of about 27%.

Roku Stock Dips as Analyst Downgrades to Sell After 'Awful' Results
 

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