Roku (ROKU) remains worth at least $155 a share on a standalone basis, but its proposed acquisition by Fox (FOX, FOXA) has limited the stock's near-term upside by tying returns to Fox's share performance and the deal process, Wedbush Securities said in a Tuesday note.
The firm said its view of Roku's fundamentals remains unchanged following the deal announcement.
Wedbush pointed to Roku's "exceptional" Q1 results, including 28% growth in platform revenue, 27% growth in advertising revenue and 30% growth in subscriptions, along with raised 2026 guidance.
Wedbush said the transaction's headline value of $160 per share was based on a reference price for Fox shares and that the real-time value had fallen to about $149 as of Monday because of declines in Fox stock.
The firm noted that the exchange ratio is fixed, leaving Roku shareholders exposed to movements in Fox shares before closing. Key variables for investors now are Fox's share performance, shareholder approval and regulatory clearance, according to the note.
Wedbush downgraded Roku to neutral from outperform and maintained its $155 price target.
Price: $138.68, Change: $-2.22, Percent Change: -1.58%