Roku stock was downgraded to “sell” from “hold” by Loop Capital analysts, causing the shares to lose more than -4% in pre-market trading Wednesday.
Loop Capital analysts argued that shares of the digital media player/streaming service company were overvalued, and therefore they could no longer hold the “hold” rating.
Last month, Roku reported its latest quarterly earnings of 5 cents a share beating analysts’ expectations. Its average revenue per user also climbed +30%. However, analysts at Wedbush at the time downgraded the stock to “neutral” from “outperform”, citing possibilities of higher spending by Roku and therefore lower operating margins than the analysts’ had previously estimated.