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Nov. 23, 2021, 9:13 a.m. EST

Why Momentum for Roku, Teledoc, and Zendesk Faded

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Nov 23, 2021 (Baystreet.ca via COMTEX) --

Technology stocks that benefited from an exponential growth in users are now going the other way. Roku /zigman2/quotes/205087179/composite ROKU +0.07% , a streaming supplier, posted quarterly results that failed to please investors. The stock is on a sustained downtrend.

Investors are worried that Roku's ad-supported content will not lift revenue. Their concerns are justified. Roku needs to sustain user growth and increase the ads per content displayed. Yet the more ads it pushes to viewers, the less appealing its service is. Conversely, Youtube gradually increased its ad content. This encouraged more users to sign up for the premium subscription.

In health information services, Teledoc Health /zigman2/quotes/207420252/composite TDOC -3.08% is on a downward trajectory. The company merged with Livongo to strengthen its offerings. Key Livongo executives left after the deal. Investors have low confidence in Teledoc's growth prospects. It will need to spend more time and energy on integrating Livongo, a distraction to the core business.

Zendesk /zigman2/quotes/209571012/composite ZEN -1.64% announced it bought Acquire Momentive in Oct. for almost $4 billion. The high price tag does not pay off until 2023. Zendesk said it will not add to its growth until 2023. It sees revenue of $3.5 billion in 2024. Shareholders are nervous that paying around one times 2024 sales is over two years of integration risks.

Avoid momentum stocks when the direction is down.

COMTEX_397538792/2559/2021-11-23T09:12:48

Is there a problem with this press release? Contact the source provider Comtex at editorial@comtex.com. You can also contact MarketWatch Customer Service via our Customer Center.

/zigman2/quotes/205087179/composite
US : U.S.: Nasdaq
$ 147.82
+0.10 +0.07%
Volume: 4.87M
Jan. 27, 2022 4:00p
P/E Ratio
72.81
Dividend Yield
N/A
Market Cap
$19.85 billion
Rev. per Employee
$1.32M
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/zigman2/quotes/207420252/composite
US : U.S.: NYSE
$ 67.44
-2.14 -3.08%
Volume: 3.29M
Jan. 27, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$11.14 billion
Rev. per Employee
$423,135
loading...
/zigman2/quotes/209571012/composite
US : U.S.: NYSE
$ 90.52
-1.51 -1.64%
Volume: 1.25M
Jan. 27, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$11.19 billion
Rev. per Employee
$302,675
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