Roku gained its biggest Wall Street bull yet when Laura Martin of Needham increased her price target to $200 on Tuesday, a 47% upside from Monday’s close.
Shares of Roku spiked as much as 7% on the news.
Martin wrote that investment risks for Roku are falling and called it the YouTube of TV and films.
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Shares of Roku surged as much as 7% Tuesday after gaining its biggest bullish rating from Wall Street.
On Tuesday, Laura Martin of Needham raised her price target to $200 for the company, which represents a 47% upside from Monday’s close of $136 per share. It’s the highest price target any analyst has for Roku, according to Bloomberg data.
The main reason for Martin’s increased target price is falling risks for Roku. “In 2020, Roku’s key upside valuation driver will be accelerating subscription SVOD revenues, which lowers investment risk,” she wrote in a Tuesday note.
Martin also wrote that Roku should be valued as an internet aggregator, like YouTube, iOS and Android, and Facebook.com are in their respective industries. “YouTube is the winning aggregator of user-generated videos and Roku will be the winning aggregator of TV and films,” Martin wrote.
Roku is well positioned because of its installed base of 40% of US connected-TV homes, Martin said. That makes it a “key gatekeeper” for any streaming service trying to get new subscribers as they “must spend more ad dollars on Roku or risk ignoring 40% of connected TV homes that their competitors are reaching,” Martin wrote.
Roku’s stock price has nearly tripled in 2019, Martin wrote. While it’s unclear if that level of growth will continue, Martin sees several drivers for the company in 2020, especially as the streaming wars heat up.
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Source:: Business Insider