From Financial Modeling Prep: 2025-01-10 17:04:00

Roku Inc. (NASDAQ:ROKU) shares dropped over 4% after MoffettNathanson downgraded the stock to Sell with a new price target of $55, down from $75. Concerns over valuation and business pressures drove the revision.

The lowered price target is based on a 14x EV-to-EBITDA multiple applied to projected 2030 GAAP EBITDA with an 8% margin, discounted back three years. The reduction reflects challenges in Roku’s long-term profitability.

Roku currently trades at a premium EV/EBITDA multiple compared to high-growth peers, but MoffettNathanson believes this valuation is too optimistic given competitive pressures and growth sustainability concerns.

Speculation of an acquisition boosting Roku’s stock was dismissed by MoffettNathanson due to lack of clear acquirer and market challenges. Despite exceeding near-term forecasts, analysts view Roku’s valuation as excessive and unsustainable.



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