Rogue stock is down and one analyst warns it is now ‘dead money’

Recommends tuning in from Wall Street Rogue (ROKU) After the streaming company returns on a severe profit warning for 2022, it is reinvesting in its business.

Shares of the company fell 25% to $ 107 Street hit the reset button on Rogue’s rating in pre-market trading on Friday.

“However, we do not expect investors to engage in riding. With a large reduction in our EBITDA, we look at Active Account value with very little confidence, so we lower our EV / Active account based valuation. We give equal weight. Until then, look at Rogue as dead money, “said Wells Fargo media analyst Steve Kahl in a statement.

Rogue saw slower growth in the fourth quarter in areas such as active accounts and average revenue per user, as people became involved in the real world again during epidemics. The company’s adjusted operating margins are down 750 basis points from a year ago amid supply chain disruptions at the edges of Roku hardware.

Here’s how Rogue performed in the fourth quarter against Wall Street estimates:

But as the company moves into one of the investment cycles like Amazon, Rogue’s outlook was desirable.

For the full year, Roku sees adjusted EBITDA (interest, taxes, depreciation and pre-debt income) to be in line with $ 150 million by 2020. The Street is looking for approximately $ 535 million in adjusted operating profit.

“As we have overcome some of the worst uncertainty surrounding the epidemic, we have decided that we can continue or return to our historic aggressive investment levels. Therefore, you see strong investment in the second half of 2021. 2022,” Roku CFO Steve Lawton Said in a revenue call.

Brian Sosey A great teacher and Editor at Yahoo Finance. Follow Sozzi on Twitter BrianSozzi And on LinkedIn.