Analyst initiates Roku with sell rating, says cost of streaming devices going to ‘zero’

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Pivotal Research Group sees Roku, an over-the-top (OTT) streaming device maker, stock falling 55% because it looks “overvalued despite the recent pullback.”

Roku shares dropped sharply on Wednesday after Comcast announced it would be giving free Xfinity Flex streaming boxes to its internet-only subscribers, a direct competitor to Roku’s devices.

“We see dramatically more competition emerging that will likely drive the cost of OTT devices to zero and put material pressure on advertising revenue,” Pivotal says.



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