after suffering a record oneday plunge july 29 in the wake of a disappointing earnings report roku shares have clawed back staging a sharp rally across the first five trading days of august to end friday’s session just 34 below where they closed just prior to the report see more roku stock plummets toward worst drop on record after ‘frankly awful’ earnings pivotal research group analyst jeff wlodarczak has downgraded the stock following that recent rebound writing that roku roku still faces considerable challenges ahead “management ramped expenses dramatically into what we believe will be a ’23 recession which is likely to lead to lower than consensus revenue growth and larger losses through ’23 and possibly ’24 depending on the length of what we view as an inevitable recession” he wrote in a sunday note to clients as he lowered his rating on the stock to sell from hold and kept a 60 price target a source of debate among analysts covering roku’s stock is whether the company is feeling admarket challenges more acutely than others in the industry and wlodarczak thinks the company is being “hit materially harder” further he worries about both the health of streaming growth and roku’s ability to maintain its positioning in the market in his view roku “substantially benefited from a fee bonanza” as companies rushed to launch new streaming services but he notes that growth for many services seems to be slowing and some offerings may shut down roku meanwhile is trying to keep expense growth in check given the current environment but wlodarczak wonders if the moves will impact the company’s longterm positioning “we agree that streaming is an important growing market mediumlong term and if roku is back on its heels for the next 912 months it gives well capitalized existing and new players an opportunity to take share potentially through much more aggressive offers” he wrote “we believe it is naive to think roku will not see declining market share over time given the importance of streaming aggregation and the large players attacking the opportunity” he called roku shares “a fundamental short at current share valuation levels” the stock is down 15 in premarket trading monday roku shares have lost about 79 over the past 12 months as the sp 500 spx has fallen 66