MoffettNathanson also cited continued weakness in the advertising space
MoffettNathanson downgraded Roku Inc (NASDAQ:ROKU) to "sell" from "neutral," and cut its price objective to $20 from $55. The analyst in coverage raised doubts about a potential acquisition, noting exaggerated optimism among investors and continued weakness in the advertising space.
ROKU is down 4.2% to trade at $79.48 at last glance, pulling back from its highest level since early December after bouncing off support at the $73 region and 100-day moving average. In the past nine months, the security added 38.6%, though it still marked an 18.9% loss for 2024.
The majority of analysts lean bearish on Roku stock, making this bear note all the more poignant. Coming into today, 14 of the 26 firms in question carried a "hold" or worse rating. Short sellers echo that pessimism, with the 9.29 million shares sold short making up 7.3% of the equity's available float.
Options look like a good way to bet on the stock's next moves, per its Schaeffer's Volatility Index (SVI) of 56% that sits in the 17th percentile of its annual range. This means options traders are anticipating lower-than-usual volatility expectations.