Shares of Roku Inc.
ROKU,
+2.84%
rallied 1.2% in premarket trading Thursday, after Pivotal Research analyst Jeffrey Wlodarczak backed away from his bearish rating on the streaming platform for TV, citing a "properly balanced" risk-versus-reward profile following this year's selloff. He recommended bearish investors "take profit" on their short positions. The stock, which bounced 2.8% on Wednesday, had closed Tuesday at the lowest price since May 2019, after a year-to-date plunge of 72.1% amid
reduced spending by consumers and advertisers
. Wlodarczak raised his rating to hold from sell while keeping this stock price target at $60, which still implies 8.5% downside from Wednesday's closing price. "Against what we view as a more encouraging backdrop and a retrenchment in the valuation we
no longer view ROKU as a fundamental short
at current valuation levels and therefore increased our rating to hold," Wlodarczak wrote in a note to clients.