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Roku Customer Acceleration Turns KeyBanc Incrementally Bullish

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Roku Customer Acceleration Turns KeyBanc Incrementally Bullish
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Accelerating customer growth and strength could drive additional upside for Roku Inc (NASDAQ: ROKU), according to KeyBanc Capital Markets. 

The Analyst

KeyBanc’s Evan Wingren maintained an Overweight rating on Roku and raised the firm’s price target on the stock from $44 to $54.

The Thesis

Customer acceleration is likely in the second quarter, as growth has continued to rise even further since mid-quarter and could drive confidence in Roku's ability to exceed consensus expectations, Wingren said in a Monday note. (See the analyst's track record here.) 

“We expect more active accounts to drive higher platform revenue and gross profits," the analyst said. 

Search volume has increased 18 percent year-over-year, which could act as a good indicator of consumer interest in Roku, Wingren said. 

Roku’s ad-supported video-on-demand channel is seeing momentum and likely gaining adoption, which could be attributed to recent content additions, in KeyBanc's view. 

“Growth in The Roku Channel could accelerate ad inventory and drive gross profits above our expectations," Wingren said. 

Price Action

Roku shares were rallying 5.68 percent to $51 at the time of publication Tuesday. 

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Photo courtesy of Roku. 

Latest Ratings for ROKU

DateFirmActionFromTo
Dec 2018SunTrust Robinson HumphreyInitiates Coverage OnHold
Dec 2018DA DavidsonUpgradesNeutralBuy
Nov 2018Morgan StanleyMaintainsEqual-WeightEqual-Weight

View More Analyst Ratings for ROKU
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Posted-In: Evan Wingren KeyBanc Capital Markets Streaming TV streaming videoAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

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