2024-07-01 11:32:24 ET
Summary
- Roku holds a substantial amount of cash, nearly 25% of its market cap, with no debt and profitable operations.
- Its current valuation at 40x forward EBITDA raises questions about further upside potential.
- Now rated as neutral due to uncertainty in revenue growth stability and current valuation concerns.
Investment Thesis
Here's the punchline, Roku, Inc. ( ROKU ) is fairly valued.
While the business has a lot going for it, for example, a tremendous amount of cash on its balance sheet, plus a business that is evidently already profitable....
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Roku: Cash-Rich But Fairly Priced (Downgrade)