Roku Falls On Questions Of Tariff Exposure

Photo courtesy of Roku. 

Roku Inc ROKU lost nearly 7% Tuesday after investors and trades circulated an InvestorPlace article discussing the streaming video company's tariff exposure.

What Happened

Roku was among a handful of companies that made the case against tariffs in Washington, D.C., InvestorPlace's Will Healy wrote.

The streaming video company has a stake in the tariff debate, as its growth prospects could be hampered or Roku may need to explore manufacturing its products in other countries, according to the story. 

Roku depends on China to manufacture its TVs, boxes, and dongles. The impact of lower growth amid higher products could impact the stock, which is already up by a factor of five since the end of 2017, according to InvestorPlace. 

Why It's Important

Roku's stock weakness likely "just began" after it peaked at $108 per share and then struggled to hold the $100 level, InvestorPlace said.

The stock also looks to be trading "ahead of its fundamentals" at 13.2 times sales, the publication said. 

What's Next

For the time being at least, there are "no signs" the bull market is ending, according to InvestorPlace.

But if Roku becomes a bigger victim of the Sino-American trade dispute, it is unlikely the current multiple will be able to support itself, the publication said. 

The stock was down 6.78% at $93.25 at the close Tuesday.