Analysts slashed their price targets on Roku Inc (NASDAQ: ROKU) post Q4 results.
Pivotal Research analyst Jeffrey Wlodarczak downgraded to Sell from Hold with a PT of $95, down from $350 (34.4% downside).
The company reported an "overall mixed" Q4 as it issued a lower than forecast 2022 revenue outlook and decided to "massively ramp" operating expenses, which drove EBITDA guidance dramatically below expectations.
KeyBanc analyst Justin Patterson lowered the PT to $165 from $325 (14% upside) and kept an Overweight.
Patterson expects Roku shares to be pressured as investment spending and 2022 revenue guidance for mid-30% growth Q1 is debated.
Truist analyst Matthew Thornton lowered the PT to $165 from $220 but kept a Buy.
Roku's platform revenue was missed due to a greater-than-expected supply chain headwind, but this issue is "transitory."
Deutsche Bank analyst Jeffrey Rand lowered the PT to $210 from $300 (45.1% upside) and kept a Buy.
He acknowledges that he underestimated the impact on the Platform business from supply constraints.
While encouraged by Roku's 2022 outlook to grow revenue 35%, Rand says "there remains plenty of uncertainty" on when supply chain dynamics will improve.
Benchmark analyst Daniel Kurnos lowered the PT to $305 from $325 (110.8% upside) and kept a Buy.
Management's early look at 2022 net revenue growth of 35% aligned with consensus and implied "a healthy recovery" in the second half. Still, they also guided adjusted EBITDA in line with 2020 levels on over $1 billion of incremental spending compared to 2020 while "leaving the expense reasoning somewhat up to the broader investment community imagination."
Wells Fargo analyst Steven Cahall lowered the PT to $125 from $305 (13.6% downside) and kept an Equal Weight.
The analyst, who thinks a bull case is a way's off, tells investors in a research note that active accounts growth could slow more quickly than expected as ARPU doesn't expand as expected.
Price Action: ROKU shares traded lower by 26.8% at $105.91 in the premarket on the last check Friday.
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