Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Roku Started With an Underweight at Atlantic Equities

Published 01/05/2022, 09:51 AM
Updated 01/05/2022, 09:52 AM
© Reuters.

© Reuters.

By Sam Boughedda

Investing.com — Roku Inc (NASDAQ:ROKU) shares have fallen over 5% Wednesday after analysts at research firm Atlantic Equities initiated the stock with an underweight rating.

Analyst Hamilton Faber set a $136 price target on the stock, well below the current price of $211.23 per share.

Faber told investors in a research note that he expects account adds to be below the current expectations due to the company's low penetration in markets outside of the U.S.

"We estimate that 80% of Roku's active accounts are located in the US, implying 34% penetration in that market and just 6% in the other markets in which it operates (Canada, Mexico, Brazil, the UK, France and several other Latin American countries)," explained Faber.

The analyst added that Roku is currently the operating system provider for 38% of U.S. smart TV sales, and Atlantic estimates total U.S. penetration will reach 40% by the end of 2025.

"We estimate annual US adds will ease from a pre-pandemic figure of around 8m in 2019 to an average of 2.3m over the next four years. Meanwhile, we expect international to pick up to average 3.2m adds from around 2m in 2019. Overall, we see global adds averaging 5.5m for the next four years (with 8m in 2022, declining thereafter), meaningfully below consensus of 10.5m million," concluded Faber.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.