Citizens raises Roku stock price target to $110 on platform growth

Investing.com - Citizens JMP analyst raised the price target on Roku Inc. (NASDAQ:ROKU) to $110.00 from $95.00 while maintaining a Market Outperform rating. The streaming platform provider, currently trading at $93.29 with a market capitalization of $13.68 billion, has demonstrated strong momentum with a 25.49% gain year-to-date according to InvestingPro data.

The firm cited Roku’s scaling demand-side platform (DSP) partnerships and consistent growth in streaming hours on The Roku Channel as key factors supporting sustained platform revenue growth.

According to Nielsen data, The Roku Channel continues to capture a larger share of U.S. streaming time, representing 5.4% in June, an increase of 170 basis points year-over-year.

Roku’s recent integration with Amazon (NASDAQ:AMZN) DSP bolsters Citizens JMP’s confidence in the company’s ability to maintain mid-teens platform revenue growth, while continued cost discipline is expected to lead to margin expansion.

Despite potential challenges from Walmart (NYSE:WMT) transitioning its Onn TVs to SmartCast, Citizens JMP does not view this as a significant near-term headwind, noting Roku’s leading TV operating system share in the U.S. and reach to over 50% of U.S. broadband TV households.

In other recent news, Roku has announced the launch of its first Roku-made TVs in Canada, available exclusively through Best Buy (NYSE:BBY) Canada. The new lineup, including QLED 4K models, will be available online immediately, with smaller models launching this fall. In addition to expanding its hardware offerings, Roku’s market presence is strengthening, as Citizens JMP reiterated a Market Outperform rating and a $95.00 price target on the company, citing Roku’s significant market penetration in the U.S.

KeyBanc upgraded Roku’s stock rating to Overweight, setting a price target of $115.00, based on advertising growth potential and strong platform growth. Needham also raised its price target for Roku to $100.00, highlighting the company’s improved labor productivity and increased revenue per employee. According to Needham, Roku’s total revenue per full-time employee rose by 34% from 2021 to 2024.

Citizens JMP noted Roku’s growing popularity, with its TV operating system being the top-selling in the U.S., and emphasized Roku’s differentiation in the streaming market. These developments reflect a positive outlook from analysts on Roku’s strategic initiatives and market position.

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