Bank of America just raised its EUR/USD forecast
Investing.com -- KeyBanc upgraded Roku (NASDAQ:ROKU) to Overweight, pointing to improved ad monetization, new partnerships, and tighter cost controls that could drive earnings above consensus in the coming years.
The firm set a $115 price target, saying Roku is becoming a “self-help” story, as it refocus on profitability after years of heavy investment.
Roku, which has lagged the broader market since mid-2022, is now showing signs of a more disciplined approach, KeyBanc said.
The brokerage raised its 2025 and 2026 EBITDA estimates by 4% and 6%, respectively, and sees 2027 EBITDA 12% above consensus.
“Roku is turning the corner,” analysts wrote, citing a mix of industry tailwinds, including the shift of ad budgets from traditional TV to connected TV, and company-specific moves such as expanding monetization on the home screen and diversifying its ad base beyond media and entertainment.
User engagement also remains strong, with viewing hours on The Roku Channel growing 84% year over year in the first quarter, far outpacing overall platform growth.
KeyBanc also highlighted new third-party ad tech partnerships with firms like Amazon (NASDAQ:AMZN) and The Trade Desk (NASDAQ:TTD), which it believes will improve fill rates and keep revenue growth in the mid-teens.
While Roku’s path to consistent profitability has been slow, the firm now expects GAAP profits by 2026 and stronger earnings in 2027.
The stock has underperformed since the pandemic, but KeyBanc sees its current valuation as offering a more favorable risk-reward profile, supported by a projected 43% compound annual EBITDA growth rate through 2027.