Bank Of America Is Bullish On Roku
Shares of Roku Inc (NASDAQ: ROKU) were rising on Monday as Bank of America started coverage of the stock with a Buy recommendation.
The Analyst
Bank of America's Ziv Israel started Roku with a Buy rating and a $154 price target.
The Thesis
Roku's leading position in the video streaming market and the fact that it has effectively shifted to generating much of its revenue through video ads, from its previous focus on hardware sales, impresses Israel.
The analyst also said concerns about negative impacts from new competition is overstated, and that strong revenue growth should continue as advertisers move money into the OTT market. Roku also should benefit from increasing demand for smart TVs, and from its strong brand recognition.
The recent drop in Roku's stock price is mostly from new streaming competition announcements, particularly from Comcast Corporation (NASDAQ: CMCSA) and Facebook Inc. (NASDAQ: FB), Israel said.
"We view the market reaction as excessively punitive, as total cost of ownership for both products is significantly higher than for the Roku device," Israel wrote in the note.
Price Action
Roku's stock was up 6.7% on Monday, trading around $142.82 per share.
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Roku To Purchase Dataxu For $150M In Cash And Roku Shares
Photo courtesy of Roku.
Latest Ratings for ROKU
Date | Firm | Action | From | To |
---|---|---|---|---|
Jan 2021 | JP Morgan | Initiates Coverage On | Overweight | |
Jan 2021 | Rosenblatt | Maintains | Buy | |
Jan 2021 | Needham | Maintains | Buy |
View More Analyst Ratings for ROKU
View the Latest Analyst Ratings
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