Wells Fargo downgraded $ROKU from ‘Equal Weight’ to ‘Underweight’ and adjusted the price target from $77 to $51.
Analysts attribute this downgrade to concerns over Walmart’s impact on ROKU’s device sales and net additions, as the retail giant acquired Vizio with its SmartCast operating system.
Walmart’s ownership of Vizio could potentially shift Walmart’s focus away from ROKU’s operating system, impacting ROKU’s net additions between 2025-26.
The competitive landscape is changing, and Walmart may direct its Walmart Connect platform toward the SmartCast installed base, affecting ROKU’s position.
ROKU’s major channel partners include Walmart, Best Buy, and Amazon, with the latter two not being media/ad companies. Walmart’s move into the CTV operating system raises concerns.
The acquisition of Vizio by Walmart, coupled with existing collaborations on shoppable ads, poses challenges for ROKU.
ROKU needs to reposition itself and articulate a compelling story to justify its fundamental value amidst the changing dynamics, especially in comparison to the Walmart/Vizio deal.
Disclaimer: It’s essential to note that these views are solely those of analysts and do not reflect our personal opinions.
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