Shares of Roku slid nearly 4% in early trading after RBC Capital Markets analyst Mark Mahaney downgraded the stock to sector perform from outperform after it reached the bank's $90 price target. Roku closed Monday at $91.37 a share.
"ROKU has generated a very consistent financial track record thus far, and as the video ad spend migrates to over-the-top, we believe ROKU can sustain robust growth," Mahaney said in a note to clients. "Overall, it appears the Street echoes this approach -- with an average top analyst price target of $91."
Thank you, #Roku streamers! ��
Roku is the #1 streaming TV platform in the U.S., according to Strategy Analytics.June 26, 2019
However, with the stock trading at a strong multiple, Mahaney believes revenue and earnings don't necessarily justify the Roku's share price above that level - even as he continues to view the company as one of the best digital streaming content providers.
Roku wasn't the only stock to get a downgrade from Mahaney. The analyst also cut his outlook and price targets on Trading Desk (TTD - Get Report) and Lending Tree (TREE - Get Report) for similar reasons.
Shares of Roku were down 3.85% at $87.85 in early Tuesday trading. Shares of Trading Desk were down 2.78% at $227.27, while shares of Lending Tree were down just over 2% at $407.08.