Needham analyst Laura Martin recommends using the post-earnings selloff in shares of Roku (ROKU) as a buying opportunity. The stock in premarket trading is down 18%, or $9.40, to $41.90. Martin keeps a Buy rating on the shares with a $50 price target. The stock will open lower based on a non-cash accounting change to Accounting Standards Codification 606 that lowers Roku's projected gross profit, adjusted EBITDA and earnings, Martin tells investors in a research note. The analyst, however, expects ASC 606 to elevate Roku's reported revenue and costs, which she feels is helpful, noting the stock likely trades on a multiple of forward revenue. At 7.0 times, Roku trades at a "sharp discount" to its closest comp, Netflix (NFLX), which trades at 10.7 times, Martin contends. She thinks investors should own Roku given the "steep discount" to Netflix despite "comparable growth credentials, a better margin profile, lower content risks, and little competitive threat from new OTT channel launches."

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