Is it a good idea to invest in Roku stock after its strong Q4?

Roku Inc (NASDAQ: ROKU) is up nearly 20% this morning after reporting market-beating results for its fourth financial quarter.

Jefferies remains super bearish on Roku

Shares went up also because the streaming platform issued better-than-expected guidance for Q1.

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None of it, however, was enough to turn Andrew Uerkwitz – Senior Analyst at Jefferies even a bit more bullish on the Nasdaq-listed firm because more broadly, he expects the advertising slowdown to continue moving forward.

Our thesis remains the same. [Ad budgets will cut this year and in 2024] as broader macro weakness hurts return on ad spend and outsized CTV growth will be driven by premium platforms that’ll not benefit Roku.

Versus the start of 2023, Roku stock is now up nearly 90%.

Roku stock could be cut in half

On Thursday, Uerkwitz raised his price objective on the California-based company to $36 a share. But that’s still alarming considering what he’s suggesting is that this tech stock could be cut in half over the next twelve months.

The Jefferies analyst is sticking to his underperform rating even though Roku reported a net increase of 9.9 million active accounts in 2022. Still, he’s convinced that incremental CTV advertising spend this year will go to the likes of Netflix and Disney+.

In a letter to shareholders, CEO Anthony Wood also confirmed that advertising did improve in limited categories but the market at large was still muted in the fourth quarter.

Analysts at Guggenheim and JPMorgan also reiterated their dovish view on Roku stock today for pretty much the same reasons.