Shares of Roku (NASDAQ: ROKU) were down 7.7% as of 10:12 a.m. ET on Tuesday. The move came after two analysts weighed in with their views on the company's near-term direction in a challenging economy.
Analysts with Wolfe Research and Raymond James Financial cited challenges for Roku in a tough advertising market, which could hurt Roku's ability to invest in technology and content in the near term. The Wolfe analyst downgraded the stock to underperform, while Raymond James initiated coverage with a market perform rating.
Advertising is the primary source of revenue for Roku, so the streaming platform isn't immune to the impact of a recession. However, it's worth noting that one ad agency still sees a strong second half for the North American ad market in 2022. Zenith expects North America to be the strongest ad region in the world, with spending expected to grow 12% this year, driven by the mid-term elections, Winter Olympics, and soccer World Cup.
Source Fool.com