CFRA downgraded shares of Roku (NASDAQ:ROKU) to Sell from Hold, keeping a $75 per share price target on the stock in a note Tuesday.
Analysts noted that ROKU's share price has seen a steep move to the upside since its late October lows, even though recent results and outlooks have not materially improved.
"We keep our 2023 LPS at -$3.50 and 2024's at -$2.40," wrote the firm. "In Q3 23, ROKU posted a normalized loss of -$0.33 (GAAP loss of -$2.33) and adj. EBITDA of +43.4M, with guidance for +$10.0M in Q4 23."
"Guidance is only reaching positive adj. EBITDA in '23, which is not an ambitious goal for a perceived growth stock that may only realize a 10% revenue CAGR in '22-'24," they added.
The firm explained that ROKU is highly dependent on advertising from both the digital scatter market and upfront sponsors and even though advertisers are shifting to streaming from linear networks, they believe the cyclical downturn in advertising demand will remain soft in 2024.
"We see this high beta (1.75) stock as exposed to volatility," concluded CFRA.