Roku (NASDAQ:ROKU) was cut to Neutral from Buy at Citi on Thursday, with analysts raising the firm's price target on the stock to $100 from $75 per share.
Analysts stated that his firm is moving to the sidelines as they feel Roku's revenue reacceleration is now priced in.
"We see scope for Roku's revenues to reaccelerate in 2024. However, given the run-up in the shares YTD (up ~120%), we believe this is largely priced into the equity," they wrote.
Analysts explained that historically, Roku's topline growth has exceeded global digital video ad spend growth, resulting in the company, on average, taking 0.5% share annually.
"While management commentary suggests more modest growth in 2023 (due to a softer ad environment), we see scope for revenues to re-accelerate in 2024. If Roku can revert to historical share gains, we believe Roku's total revenue can return to ~20% growth."
However, they again stated that the recent run-up in the shares means the revenue increase is priced in, and they see "limited upside from here."