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Roku: Market Sweats The Details Too Much

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Update - Nov. 18, 2024

Baird ups Roku to a PT of $90, up from $70.

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-Analysts at Baird upgraded Roku (NASDAQ:ROKU) to "outperform" from "neutral," and the research firm thinks the company's shares are not reflecting the meaningful changes in the business and the attractive long-term opportunity.

-Baird noted that ROKU is down 25% so far this year compared to the benchmark S&P index's 23% rally. But their optimism for the upside is pegged on increasingly favorable industry trends, positive developments in the company's strategy, and encouraging early indicators in recent results.

-They expect the company to deliver sustained double-digit platform revenue growth going ahead and continued margin expansion, driving upside across estimates and valuation over time.

-ROKU has a PT of $90, hiked from $70, implying an upside of nearly 31%. Shares of the company are up nearly 3% in premarket trading on Monday.

Finviz Chart

Original article posted on Oct. 31

  • Roku, Inc. reported strong Q3 2024 results with revenues growing a crisp 16%.
  • The stock is slumping due to weak guidance, though the company has a history of conservative guidance leading to big quarterly beats.
  • Roku is cheap at 2x EV/S targets with the potential for upside growth due to new initiatives.
Roku, Inc. (NASDAQ:ROKU) delivered another strong quarter, but the market wasn’t happy. The streaming platform continues to produce consistently strong growth, yet the stock doesn’t get any respect. My investment thesis is ultra-Bullish on the large opportunity to monetize a massive and growing user base while the stock trades down.

Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

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