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Roku Analysts Dissect Turnaround Story: 'Stronger Cash Flow Profile'

Published 07/09/2023, 16:29
Updated 07/09/2023, 17:40
© Reuters.  Roku Analysts Dissect Turnaround Story: 'Stronger Cash Flow Profile'
ROKU
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Benzinga - by Priya Nigam, Benzinga Staff Writer.

Shares of Roku Inc (NASDAQ: ROKU) were pulling back Thursday after the company updated its third-quarter guidance.

Needham On Roku

Analyst Laura Martin maintained a Buy rating on Roku and raised the price target from $85 to $100.

Roku raised its revenue and adjusted EBITDA guidance for the third quarter, attributable in part to a one-time write-off in the back half of 2023, Martin said in a note.

Roku's new CFO Dan Jedda was trained at Amazon and “brings a FCF-first focus” to the company, the analyst said.

“We estimate that Roku's OpEx will fall by about $110mm y/y in 2024, of which $60mm benefits both FCF and Adj EBITDA,” she added.

Check out other analyst stock ratings.

Benchmark On Roku

Analyst Daniel Kurnos reiterated a Buy rating while lifting the price target from $89 to $115.

Roku’s narrative of “striking a healthier balance between growth and profitability” has changed significantly, which “should give investors increased confidence in a much stronger cash flow profile even at more modest scale, Kurnos said.

Although the company has guided to revenue and EBITDA higher than Street expectations, the 2024 consensus may not “change too materially given the ongoing uncertainty in the macro, softness in scatter, and the puts and takes around adjusted EBITDA, including stock comp assumptions and incremental rehiring,” the analyst added.

ROKU Price Action: Shares of Roku were down 1.98% at $84.48 Thursday morning.

Related Link: Roku To Rally Around 17%? Here Are 10 Other Analyst Forecasts For Thursday

Latest Ratings for ROKU

DateFirmActionFromTo
Feb 2022Morgan StanleyMaintainsUnderweight
Feb 2022BenchmarkMaintainsBuy
Feb 2022GuggenheimMaintainsBuy
View More Analyst Ratings for ROKU

View the Latest Analyst Ratings

© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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