Roku: A Strong Buy Amid Strategic Moves and Healthy Market Trends

Roku maintains a Buy rating from analyst Daniel Kurnos at Benchmark Co. due to strong market trends and strategic moves. The analyst expects platform revenue growth of 16-17%, above the current consensus, and notes Roku's cost management could lead to better-than-expected EBITDA performance. Kurnos believes Roku is a strong long-term investment idea with potential to break out of its recent trading range and deliver upside through 2026.

Roku, a leading player in the Connected TV (CTV) market, has received a Buy rating from analyst Daniel Kurnos of Benchmark Co. [1] The analyst expects platform revenue growth of 16-17%, surpassing current consensus estimates, and believes Roku's cost management could lead to better-than-expected EBITDA performance. Kurnos sees Roku as a strong long-term investment with potential to break out of its recent trading range and deliver upside through 2026.

Kurnos attributes Roku's potential for growth to a combination of factors, including a healthier-than-expected CTV ad market, strong engagement trends, and strategic moves. The analyst notes that Roku has gained shelf space at other retailers and stands to benefit from partnerships like the Amazon DSP coming online. Furthermore, Kurnos highlights Roku's ability to manage costs effectively, which could result in better-than-expected EBITDA performance.

In a separate report, JPMorgan analyst Cory A Carpenter reiterated an Overweight rating on Roku, raising the price forecast from $85 to $100 [2]. Carpenter expects stable advertising spending in the second quarter and sees potential for an additional $40 million in revenue from the Frndly acquisition. He also anticipates a boost from the upcoming Amazon DSP partnership, which could further enhance Roku's platform revenue growth.

Both analysts are optimistic about Roku's prospects, with Kurnos and Carpenter raising their revenue growth estimates and price targets. Investors should closely monitor Roku's upcoming second-quarter earnings release on July 31 to gauge the company's performance against these expectations.

References:
[1] https://www.tipranks.com/news/ratings/rokus-growth-potential-a-buy-rating-amid-strategic-moves-and-strong-market-trends-ratings
[2] https://www.benzinga.com/analyst-stock-ratings/analyst-color/25/07/46500178/roku-set-for-q2-spotlight-as-ad-resilience-frndly-boost-amazon-deal-fuel-investor-optimism