The 200% rise in Roku this year has made the stock too expensive: Stephens

Roku's value tripled this year, outperforming almost all outstanding technology stocks, and Kyle Evans of investment bank Stephens said the rally had finally gone too far.

Evans lowered his rating on Roku from "overweight" to "equal weight", due to too high risk in the short term for the title after the soaring that pushed the streaming video company to a capitalization stock market of about 11 billion dollars. The analyst pointed to last year's third quarter results and Roku's slight lack of turnover on the platform, which pushed the stock down to 22%.

Shares fell about 5% to $ 91.14 on Tuesday after falling to $ 89.02.

Roku has taken advantage of the rapid transition from traditional pay-TV to over-the-top content and the growing number of cable channels that have launched their own subscription offerings to try to keep pace with Netflix and the Internet. # 39; Amazon. Roku sells its own streaming devices with thousands of channels and also provides an operating system for smart TVs. The business generates revenue when users subscribe to its service subscriptions as well as to platform advertisers.

Roku's revenues jumped 51% in the last quarter to more than $ 206 million, up from 36% a year earlier.

"Although we remain very positive about Roku" in the long-term smart TV market, "we think the recent increase and higher valuation", coupled with higher expectations, creates too much risk for the course of action, wrote Evans. Its price target of $ 84 assumes it will trade at 16.2 times the estimated gross profit of 2020, down from a multiple of 18.5 at the time of publication of its report.

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