Roku Plunges After Morgan Stanley Warning About Growth Risks

(Bloomberg) -- Roku Inc. slumped Monday after Morgan Stanley cut its rating on the stock and warned clients that revenue and gross profit growth may “slow meaningfully” next year..Shares of the streaming-video platform fell as much as 17% in New York, their biggest decline since Nov. 7. The stock has soared more than 350% this year amid what Morgan Stanley analyst Benjamin Swinburne referred to as “exuberance over all things streaming.” He downgraded the stock to underweight from equal-weight, becoming just the third analyst with a sell-equivalent rating on the shares, among 18 tracked by Bloomberg..With Roku’s valuation now exceeding both digital media players and even high-growth software-as-a-service companies, Swinburne sees the risk profile skewed to the downside. It will be “increasingly difficult to sustain the current premium,” especially as growth moderates, he said in a research note..To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net.To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Steven Fromm.©2019 Bloomberg L.P.

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Roku Plunges After Morgan Stanley Warning About Growth Risks

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