Roku (ROKU) is on track to reach profitability in the next two years as the company is positioned to benefit from increasing ad demand, buoyed by new inventory, improved targeting, sports-adjacent ads, and new partnerships with demand-side platforms, Wedbush Securities said in a Friday note.
"Roku continues to take market share as ad dollars shift from linear TV to digital connected TV, or CTV, and benefited handsomely from the shift of political dollars toward CTV in H2," said the investment firm.
Wedbush noted that the company's focus on curating and suggesting content, along with expanding its home screen ads and advertising partnerships with third-party platforms, continues to drive incremental subscription and ad revenue.
The investment firm also said it expects Roku's 2024 earnings before interest, taxes, depreciation, and amortization to exceed $200 million, given the company's conservative topline outlook and continued focus on expense discipline.
Wedbush reiterated its outperform rating on Roku and raised its price target to $100 from $85.
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