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On Tuesday, Benchmark analysts maintained their Buy rating on shares of Roku Inc. (NASDAQ:ROKU), currently trading at $75.89 with a market capitalization of $11 billion, maintaining their $100.00 price target.
The firm's analysts highlighted Roku's tumultuous journey throughout 2024, which saw investor sentiment swing from disappointment to takeover speculation, ultimately stabilizing with a sense of cautious optimism.
According to InvestingPro data, Roku's stock price movements have been notably volatile, with the stock trading between $48.33 and $99.80 over the past 52 weeks. Benchmark has positioned Roku as one of its top picks for 2025, diverging from other bullish outlooks by not anticipating an acquisition within the year.
Instead, they focus on the potential for substantial revenue growth stemming from third-party demand-side platform integrations and the expansion of home screen monetization efforts.
The analysts at Benchmark have illustrated scenarios in which these initiatives could generate nearly $1 billion in incremental revenue beyond current expectations, assuming these are not yet factored into consensus forecasts. This potential expansion builds upon Roku's already impressive 15.71% revenue growth over the last twelve months.
However, InvestingPro analysis indicates that analysts don't expect profitability this year, with forecasted EPS at -$1.08 for 2024. Even when considering the possibility of some media and entertainment revenue being cannibalized by new home screen strategies, they project that the revenue difference compared to their own estimates could reach hundreds of millions of dollars, acknowledging that achieving full scale will require time.
Benchmark's commentary noted that Roku's stock price is currently at the upper end of its recent trading range. They believe that consistent outperformance will be necessary for the stock to break out further. The analysts also suggested that there is additional potential from Roku if it were to secure a deal with Google (NASDAQ:GOOGL) to monetize YouTube, which could offer further upside to the company's stock.
Roku, a leading streaming platform, has been the subject of varied analyst opinions, with Benchmark's outlook representing a more detailed and optimistic view on the company's revenue-generating capabilities. As Roku continues to navigate the competitive streaming market, the company's strategic initiatives will be closely watched by investors and industry observers alike.
InvestingPro rates Roku's overall financial health as 'FAIR', with particularly strong scores in cash flow management. Subscribers can access 6 additional ProTips and comprehensive financial analysis through the platform's detailed research reports.
In other recent news, Roku Inc. has been the focus of several noteworthy developments. Wolfe Research reiterated an Outperform rating on Roku, focusing on the potential of Roku's Platform segment. The firm's analysis suggests the segment could achieve a mid-teens percentage sales Compound Annual Growth Rate (CAGR) through the fiscal year 2027. Moreover, the company announced a significant milestone, surpassing 90 million streaming households.
Roku also announced the upcoming departure of Gidon Katz, Senior Vice President of Platform Products & User Experience, effective April 2025. In other executive news, Loop Capital recently increased Roku's price target to $80, maintaining a Hold rating.
The company recently unveiled Roku Data Cloud, a data solution designed to enhance TV streaming investments for advertisers and publishers. Lastly, despite these positive developments, analysts from InvestingPro do not anticipate profitability this year for Roku. These are recent developments in Roku's trajectory.
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