StockBeat: Roku Gets Price Upgrade Ahead of Earnings
Investing.com – Roku has been given a vote of confidence a day ahead of its earnings as Rosenblatt on Tuesday raised its price target on the streaming-device company, betting that its quarterly results will impress.
Rosenblatt raised its price target on Roku to $159 from $134, estimating that the third-quarter earnings and guidance are set to outperform expectations. Roku (NASDAQ:ROKU) bounced off session lows to trade roughly flat.
Rosenblatt estimates that the company managed to grow its active accounts by 31% during the quarter.
But leading up to the quarterly earnings print, not everyone is convinced that Roku deserves a spot on the list of fashionable investing.
Just last month, Pivotal Research slapped a sell rating on Roku, warning that its valuation was running too hot at a time when competition is heating up.
Comcast (NASDAQ:CMCSA) has rolled out its Xfinity Flex streaming box and Facebook (NASDAQ:NASDAQ:FB) launched its Portal TV streaming device.
“We see dramatically more competition emerging that will likely drive the cost of OTT (over the top) devices to zero and put material pressure on advertising revenue,” Pivotal said.
Looking ahead, many expect that the company will find it hard to turn a profit for several years as it funds its international expansion and competes for TV licensing contracts.
Roku is up 356% for the year and has an average price target of $135, according to consensus estimates from Investing.com.
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