By Angela Palumbo
Roku stock is worth buying now, BofA Securities says, as the company cashes in on increased engagement in streaming while more people turn away from traditional t.v.
Analyst Brent Navon reinstated coverage of Roku on Thursday with a Buy rating and $100 price target, which implies a 28% increase from the stock's last closing price of $77.87.
"We believe Roku is poised to enter the next phase of monetization which will drive revenue and profitability growth for the foreseeable future," he said in a research note.
Shares of Roku have risen 4.1% this year, while the S&P 500 has declined 3.1%. The stock jumped 14% on Feb. 14 after the company posted better-than-expected fourth-quarter financials and said the number of hours viewers spent streaming content on The Roku Channel grew 82% from the previous year.
Roku has also consistently increased its user base. It had 90 million active accounts in 2024, a jump from the prior year's 80 million.
"Their hardware coupled with its user-friendly software operating system has led Roku to amass a market leading position, with a substantial user base, which actively engages on their platform to the tune of 127bn hours cumulatively in 2024," Navon wrote. "We view this scale as an underappreciated and untapped asset."
A bit more than half of the 34 analysts surveyed by FactSet rate the stock as a Buy. Near this time last year, only 33% of the 30 analysts who covered the stock had Buy ratings.
Needham analyst Laura Martin rates Roku stock at Buy with a $120 price target. Martin wrote in a note on Monday that she believes Chief Executive Officer Anthony Wood is a "war Time CEO who, since 2015, has outsmarted GOOGL and AMZN to grow Roku's installed base of homes by 10x."
Write to Angela Palumbo at angela.palumbo@dowjones.com
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March 27, 2025 15:06 ET (19:06 GMT)
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