Roku Inc (ROKU) shares plummeted 5.11% in Tuesday's trading session, as investors reacted to a negative analysis highlighting several concerns about the company's performance and future prospects. The streaming platform provider faced scrutiny over its declining customer spending, shrinking profitability, and downward trending earnings per share.

According to the report, Roku's average revenue per user (ARPU) has been on a downward trend, falling an average of 2.4% annually over the past two years. This decline in customer spending raises questions about the company's ability to monetize its user base effectively. Additionally, Roku's EBITDA margin has decreased by 10.5 percentage points over the last few years, signaling potential issues with the company's expense management and profitability.

Further adding to investor concerns, Roku's earnings per share (EPS) have declined by 32.8% annually over the last three years, despite revenue growth of 14.2%. This disconnect between revenue growth and profitability has led some analysts to recommend selling Roku stock in favor of other investment opportunities. The negative sentiment surrounding these metrics likely contributed to Tuesday's significant stock price drop, as investors reassessed their positions in light of these challenges.