Why Roku, Ollie's Bargain Outlet Holdings, and Lexicon Pharmaceuticals Slumped Today
Monday wasn't a good day on Wall Street, as major benchmarks started the final month of 2019 with across-the-board declines. The White House reignited trade disputes by taking away a previous exemption to steel tariffs for imports from Brazil and Argentina, and market watchers wondered what might happen at this week's NATO summit in London. A host of stocks had to deal with bad news of their own. Roku (NASDAQ: ROKU), Ollie's Bargain Outlet Holdings (NASDAQ: OLLI), and Lexicon Pharmaceuticals (NASDAQ: LXRX) were among the worst performers. Here's why they did so poorly.
Shares of Roku dropped 15% after a prominent analyst raised doubts about the streaming TV company's growth prospects. Morgan Stanley cut its rating on Roku from equal weight to underweight, citing nervousness about several aspects of its potential future growth. Rising competition could make it more difficult for Roku to sustain healthy growth rates for its ad-based revenue sources, and slowing gains in active accounts could mean the end of the company's fastest-growth phase. Although Morgan Stanley boosted its price target by $10 to $110 per share, that's still well below where Roku's stock trades even after today's decline.
Image source: Roku.
Source Fool.com
