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On Monday, Citizens JMP analysts reaffirmed their Market Outperform rating for Roku Inc. (NASDAQ: NASDAQ:ROKU), maintaining a price target of $95, within the broader analyst range of $60-$130. The decision reflects the company’s ongoing potential in the streaming market, supported by its 17.3% revenue growth over the last twelve months. According to InvestingPro data, the stock has gained 7.52% in the past week.
Research conducted by Magna and Roku shows that 60% of paid streaming viewers and 70% of free streaming viewers tend to browse before selecting content. This behavior underscores the importance of Roku’s advertising model, particularly in reaching free streaming viewers.
The research further indicates that free streamers are 78% more likely to remember ads displayed on the homepage compared to their paid counterparts. This finding highlights the effectiveness of Roku’s ad placements in capturing the attention of free streamers.
The analysts’ reaffirmation of the price target and rating reflects confidence in Roku’s strategy and its ability to engage both paid and free streaming audiences effectively. Based on InvestingPro’s Fair Value analysis, the stock is currently trading near its fair value. Subscribers can access 8 additional ProTips and a comprehensive Pro Research Report for deeper insights into Roku’s financial health and market position.
In other recent news, Roku Inc. reported its first-quarter 2025 financial results, surpassing analyst expectations with an earnings per share (EPS) of -$0.19, better than the forecasted -$0.26. Revenue reached $1.02 billion, slightly above the anticipated $1.01 billion. Despite this earnings beat, Rosenblatt analysts adjusted their outlook, lowering the price target from $100 to $75, citing a potential slowdown in Roku’s Devices business. Evercore ISI also reduced its price target from $105 to $80, following mixed first-quarter results and forward guidance, while maintaining an "In Line" rating.
Benchmark analysts maintained their Buy rating with a $130 price target, expressing confidence in Roku’s platform outlook and anticipated growth in advertising revenue. They noted that a nearly $100 million acquisition expected to close in late Q2 would not significantly impact Roku’s full-year guidance. Citizens JMP reiterated its Market Outperform rating with a $95 target, highlighting Roku’s strong position in the streaming market and potential for growth through various strategic initiatives.
The company reported a 16% year-over-year revenue increase and a 37% growth in adjusted EBITDA. However, Roku’s management has revised its revenue guidance for FY25 based on a more conservative outlook for device sales. Despite macroeconomic uncertainties, analysts from Benchmark and Citizens JMP remain optimistic about Roku’s long-term growth potential.
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