By Sam Boughedda
Investing.com -- Roku Inc (NASDAQ:ROKU) shares declined over 4% on Wednesday after Morgan Stanley reiterated an underweight rating.
Analyst Benjamin Swinburne said in a client note that while Roku continues to be the leading streaming TV platform in the U.S., with its engagement share up 41%, they see two headwinds regarding U.S. active account growth.
"First, smart TV sales in the US are likely flat to potentially down in '22 due to 2020 pull forward of sales and continued supply chain impacts on inventory and TV prices," explained Swinburne.
Adding that the second headwind is the company's most important original equipment manufacturer partner, TCL "continues to gradually introduce more Google TV SKU's which, all else equal, puts downward pressure on Roku powered TCL TVs."
The analyst said the market overvalues active accounts, as "the relationship between active accounts and revenue is somewhat tenuous," but "KPI's are drivers of share performance and Active Accounts are likely the most important KPI."
Earlier this week, Wedbush cut the price target on Roku shares to $220 from $365, based on the belief that the company's active account growth "meaningfully decelerated" over the second half of 2021.