2024-02-17 13:30:00 ET
Summary
- Roku stock has plunged nearly 30% since my previous article, as I warned investors to flee.
- Roku's surprisingly tepid guidance on media and entertainment spending likely surprised the market.
- It could hurt Roku's ability to grow its adjusted EBITDA significantly, which is necessary to justify its expensive growth premium.
- Roku's fundamental drivers have improved, bolstering its market leadership.
- I view the post-earnings battering as a fantastic opportunity for investors to re-engage with ROKU, as its risk/reward has improved markedly.
In mid-December, I warned Roku, Inc. (ROKU) investors that ROKU's FOMO surge wasn't sustainable as it surged into well-overvalued zones . As a result, a further valuation re-rating would have required the company to deliver significant outperformance to justify such a move. With ROKU down nearly 30% from my previous Sell article as it underperformed the S&P 500 (SPX) (SPY) significantly, I consider the thesis to have played out accordingly....
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For further details see:
Roku: I Warned Investors To Flee. Now, It's Time To Return (Upgrade)