Roku Inc (NASDAQ:ROKU) shares see-sawed on Tuesday after a once-bullish analyst downgraded the stock on profitability concerns.
Analysts at KeyBanc claimed in a new note that consensus estimates for 2023 and 2024 appeared too optimistic, according to reports.
Shares of the streaming device maker dropped nearly 4% in premarket trading but bounced back by midday, up 1.3% at just over US$54.50.
READ: Roku continues to frustrate but analysts at Oppenheimer see value
Keybanc’s Justin Patterson, a long-time Roku bull, wrote that the factors influencing his optimistic outlook – TV advertising growth and partnerships with big media firms – hadn’t materialized.
As a result, Patterson downgraded Roku to “Sector Weight” from “Overweight.” Keybanc did not cite a price target on the stock.
Shares of Roku are down nearly 75% this year.
Earlier this month, it confirmed plans to lay off around 200 workers in a bid to cut expenses.
Contact Angela at angela@proactiveinvestors.com
Follow her on Twitter @AHarmantas