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Rokus haywire week | Fox Business



Roku's rosy forecast

The streaming service has improved its forecast, and as more and more people start streaming, investors are optimistic.

This week, streaming player Roku must have felt like swimming against the tide. [19659004] Earlier in the week, Roku's stock took a hit as media giant Comcast and social media kingpin Facebook announced threats to Roku's turf. The stock rebounded as the company announced a new product line mid-week. Friday, however, saw a big boost as the Pivotal Research Group started reporting on the company ̵

1; but with a "sell" rating that brought the stock down to nearly 20 percent. However, good news came after the bell, after some were regained by a large financial group.

"We see dramatically more competition that will likely bring the cost of OTT devices down to zero," Pivotal analyst Jeffrey Wlodarczak wrote in a Friday announcement to investors.

While the stock of the over-the-top equipment vendor rose more than 252 percent during the year, this week shows just how volatile the streaming landscape is for Roku and other players.

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Wlodarczak referred to a number of new market developments, including the announcement of a free alternative by Comcast, the Xfinity Flex streaming box, which they will be giving to their Internet subscribers. He believes this is "likely to be copied by other distributors".

This will put pressure on hardware and subscription revenues, but it will improve the prospects for subscription video-on-demand services that we'll be offering over it as advertising and "other" revenue through free , ubiquitous dissemination can be generated.

"Unfortunately, Roku may have been beaten by competitors and gamers due to their already high 50/50 advertising splits with OTT players. The already huge spend on content from the distributor gives them tremendous leverage," the report said.

All this leads Wlodarczak to wonder how Roku can compete with the "big boys" headed by Comcast, who classify Pivotal as a "buy", and that this is the case making Roku's "growth much more difficult".

"In our view, despite the recent withdrawal, the Roku stock still appears to be dramatically overvalued, and we start with a" sell "and a target price of $ 60," concludes the report.

The report was for Roku Bright spot: "The management deserves a lot of credit for what it has created, and Roku is one of the few pure OTT investment companies."

As a spokeswoman for Roku after one Commenting, she said to FOX Business: "We do not comment on an analyst's views," and attempts to reach Wlodarczak for additional comments were unsuccessful.

"In our view, despite the recent decline, the Roku stock still seems to be dramatically overvalued, and we are opening with a & # 39; sale & quot; and a target price of $ 60 & # 39;

Pivotal Research Group Analyst Jeffrey Wlodarczak

Following the closing bell, Oppenheimer Funds announced they would maintain their "outperform" rating and raise their price target from $ 120 to $ 155 "after assessing the impact of Roku's and Roche's international expansion plans new OTT streaming services coming on stream in the fourth quarter and 2020. "" There is a consolidated market structure. "The company also estimates that" Apple +, Disney + and a mix of others (especially HBO Max) 21 USD / share in a combined uptrend will "and see that Roku benefits from its US penetration (~ 33%), directly applies and sells SVOD subscriptions, with competition from new ones Participants (Comcasts and FBs portal) is too late. "

This shows Oppenheimer sees the effects of the Xfinity Flex streaming box from Comcast and the Facebook offering on the future prospects of Roku just the opposite.

Ticker Security Last Change % Chg
ROKU ROKU INC 108.05 -25.71 -19.22%

Also Oppenheim The US $ 10 is added to the UK market if it can participate in older brands, "through a similar playbook as in the US: Promote acceptance of high-quality, moderately priced TVs through OEM partnerships [original equipment manufacturer]."

When Wall The street is open for business on Monday morning. Perhaps this upgrade – predicting that Roku's share price will return to the level it opened this week – may provide a recovery.

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