Roku Inc. (NASDAQ: ROKU) shares were crushed on Monday after one key analyst came out with a report positing that the rally may be over for this stock. Roku has been a Wall Street darling all year, with its shares practically quintupling in this time. However, Morgan Stanley believes that this incredible run is at its end.

The overriding thesis of the report is that all of Roku’s growth is already priced in to the stock. Morgan Stanley’s Benjamin Swineburne downgraded Roku to Equal Weight from Overweight but raised its price target from $100 to $110.

Excluding Monday’s move, Roku shares were up 423% year to date and 312% in the past 52 weeks.

Although the call is still bullish on Roku’s growth prospects, Swinburne points out that Roku’s valuations have risen far higher than rival digital media players and software as a service (SaaS) companies at the same time it has much lower gross margins than most companies that are considered its peers.

Ultimately, Roku’s valuation premium will be difficult to sustain. Morgan Stanley also expects to see declines in gross margins and moderating gross profits, which skews Roku’s risk/reward to the downside.

Roku reported its third-quarter financial results early in November. At that time, a few analysts jumped on the opportunity to raise their targets. Here’s what a few analysts had to say in the wake of those earnings:

• Merrill Lynch has a Buy rating with a $160 price target.
• Guggenheim has a Buy rating and a $150 price target.
• RBC has an Outperform rating with a $160 target price.
• Needham rates it as Buy with a $150 target price.
• Wedbush has a Hold rating and a $105 price target.

Shares of Roku traded down about 15% to $135.54 on Monday, in a 52-week range of $26.30 to $176.55. The consensus price target is $141.04.

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