RokuShares plunged 10% Wednesday after Atlantic Equities stated that growth prospects were dimming due to increased competition and as the company tries to expand abroad.

In a report sent to clients, Hamilton Faber, Atlantic Equities analyst, stated that Roku has made the most of its business in America. We believe that the company has reached saturation in America unless it wins over more major OEMs. This is likely to happen in the short term.

Atlantics began coverage on Roku with a $136 price target, which is 39% lower than Tuesday’s close price. Stock fell to $200 Wednesday.

Roku will face stiff competition as it tries to have its operating systems installed on additional TV sets as well as the streaming stick market. This is where big-names are. Amazon GoogleFaber claims that these people are fighting.

Amazon saidOn Wednesday, it sold 150 million Fire TVs. Roku currently has more than 56 million active accounts. However, it’s difficult to compare because Amazon counts devices and does not include Fire TVs that aren’t being used.

Atlantic believes that Roku will have a U.S. share of around 40%. Faber also sees Amazon and Google as the future. SamsungIt’s a strong competitor because it is building its own smart TV platform. LG, another big TV manufacturer is also doing the exact same.

He wrote, “As such we struggle to imagine a near-term scenario where Samsung or LG would seek to outsource Roku.”

Roku requires more users to ensure its continued growth. Although the company does sell hardware to TV manufacturers and licences software, its main business is advertising in streaming content provided by Roku. It can be a gatekeeper for TV ads and get a bigger share of the revenue by having more accounts.

Roku stock dropped Wednesday, adding to the sell-off which began in mid-2021. The shares have lost 58% since July’s peak at $479.50.

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