Roku Share Price Drop

RBC Capital Markets brought down its rating on Roku to part perform from outflank after the stock has about significantly increased for the current year.

Roku share price dropped by 3.6% in trading on Tuesday from its previous close of $91.37 per share.

“Given what we view as sustainably robust growth and profitability levels, we believe ROKU’s YTD outperformance is fully justified,” RBC Analyst Mark Mahaney said in a note to speculators on Monday. “However, with the stock now trading at an intrinsically robust multiple [of 11 times its price to sales ratio], we see risk–reward as less compelling. Hence the downgrade.”

Roku has “significantly outperformed the market,” Mahaney noted, as the stock rose by 198.2% so far this year through Monday versus the S&P 500′s gain of 18%. RBC did not modify its $90 value focus on Roku shares.

“Given our view here, we would be constructive again on any major stock pullback,” Mahaney included.

Source – CNBC News

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