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Since Apple Inc. announced in late March that it will step up its video content efforts, investors are debating the meaning of the changes for Roku Inc.
On the one hand, Apple
AAPL, + 0.17%
plans to start playing more pleasantly with other players in the media industry, which will allow users to watch its new TV apps on their Roku
ROKU, -5.99%
devices. Nevertheless, Apple's announcements mean that there will be another competitor in the media landscape, with its own hardware and its own options for buying premium subscriptions to channels such as HBO and Showtime.
Read: People can reach their limit on streaming services
Although Roku's shares won the day of Apple's streaming event, they were agitated in the following days. That includes a decline of more than 8% in Thursday's trading session, after an analyst called Apple's new interest in programming a potential threat and demoted the stock to neutral.
"We believe that the Apple video product unveiled on March 25 represents an additional risk to Roku's active user base (even though the platform includes The Roku Channel) while the
AMZN, -0.10%
and Viacom
VIAB, -0.27%
more and more video-on-demand (AVOD) advertising is increasing competition, "wrote Michael Morris of Guggenheim.
See also: Stocks on Facebook win after Guggenheim upgrade
Morris pointed to the sale of 100,000 shares by CFO Steve Louden, who "has also shaken our confidence" and represents Louden's holdings in non-option stocks.
Morris wrote that Wall Street's consensus expectations seemed to translate into faster growth in the US dollar and continued active account additions, although he remains optimistic about the secular trends that underpin business activity. of Roku. He lowered his price target on the stock from $ 77 to $ 72.
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Roku's shares have more than doubled this year, while the S & P 500
SPX, + 0.21%
climbed 15%.
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