Robinhood shares gain on Q2 beat, as user and crypto growth accelerate
On Wednesday, Citizens JMP adjusted its price target on Roku Inc. (NASDAQ:ROKU), reducing it to $95 from the previous $116, while the stock currently trades at $59.23. The firm maintained a Market Outperform rating on the stock. Matthew Condon, representing the research firm, provided insights into the decision, citing a variety of factors both in support of and against the company’s outlook. According to InvestingPro data, Roku’s stock has shown significant volatility, declining over 20% year-to-date, though analysts maintain targets ranging from $60 to $130.
Condon acknowledged potential challenges for Roku, such as the Onn brand and a more competitive TV operating system market. However, he also pointed to Roku’s user-friendly interface and significant market penetration, with access to over half of U.S. broadband households, as key competitive advantages. The company’s strong market position is supported by its solid financial foundation, with InvestingPro data showing a healthy current ratio of 2.62 and more cash than debt on its balance sheet.
The analyst highlighted several areas where Roku could potentially increase its revenue, including partnerships with third-party demand-side platforms (DSPs), the utilization of its Home Screen, growth of The Roku Channel, and expansion of Roku-billed subscriptions. These factors, Condon suggested, could lead to higher financial estimates for the company.
Despite the reduced price target, Citizens JMP sees the current valuation of Roku shares, trading at approximately 13.5 times its projected 2026 earnings before interest, taxes, depreciation, and amortization (EBITDA), as an attractive risk/reward scenario for investors.
The adjustment in Roku’s price target by Citizens JMP takes into account the broader economic uncertainties and the possible effects of tariffs on advertising expenditures, particularly concerning connected TV (CTV) platforms. Condon’s commentary reflects a cautious yet optimistic outlook for Roku’s financial performance in the face of these external pressures.
In other recent news, Roku Inc. is preparing for its upcoming earnings announcement, with Benchmark analysts maintaining a Buy rating and setting a price target of $130. They highlighted Roku’s potential for organic growth, despite broader market pressures, and noted that expectations across the industry have been tempered. Meanwhile, JMP Securities has maintained a Market Outperform rating with a $115 price target, addressing the ongoing dispute over the leading TV operating system provider in the U.S. between Roku and Samsung (KS:005930). Redburn-Atlantic upgraded Roku’s stock from Neutral to Buy, setting a $100 price target, citing Roku’s strong financial position and the shift of advertising dollars towards Connected TV. On the other hand, Citi analysts have reduced Roku’s price target to $81 from $103, citing concerns about a weakening macroeconomic environment and increased tariff risks. Despite these challenges, Roku’s position in the competitive TV operating system market remains strong, with continued leadership in streaming market listings, as noted by JMP Securities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.