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Roku's Trading Volume Drops 37.98% Despite Stock Price Surge to Second Consecutive Day of Gains

Market BriefTuesday, May 13, 2025 7:42 pm ET

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On May 13, 2025, Roku's trading volume reached $342 million, marking a 37.98% decrease from the previous day. The stock price rose by 3.81%, marking the second consecutive day of gains, with a total increase of 17.18% over the past two days.

Roku has recently received positive ratings from several financial institutions. Bank of America upgraded the company to a Buy rating with a price target of $100, citing strong user growth. Needham & Company LLC also reaffirmed their Buy rating on Roku shares. Additionally, Wedbush set a Buy rating and a $100 price target, although they previously had a higher target price of $125.

Analysts have provided a range of 12-month price targets for Roku, with an average target of $99.55. The highest estimate is $130, while the lowest is $68. This range reflects the varying opinions on the company's future performance. Benchmark has revised its rating to Buy with a price target of $130, while Wells Fargo maintains its stance on the stock.

Roku's financial outlook includes projections of positive operating income by 2026, driven by double-digit revenue growth. The company's CFO, Dan Jedda, has been recognized for his role in achieving significant free cash flow growth, with projections exceeding $200 million. Roku is also expanding its average revenue per user (ARPU) through increased ad inventory and enhanced targeting, contributing to a more diversified business model.

However, there are potential risks to Roku's financial outlook. The competitive landscape in the connected TV (CTV) industry poses a threat to sustaining current advertising revenue growth. Additionally, macroeconomic conditions and tariff impacts could negatively affect the company's performance. Despite these challenges, Roku's recent acquisition of Frndly TV is expected to contribute approximately 200 basis points to revenue, further diversifying its business model.

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