Here's Why DA Davidson Sees 59% Upside In Roku

  • DA Davidson analyst Tom Forte kept his Buy rating and $200 price target on Roku Inc ROKU. The price target implied an upside of 59.3%.
  • Forte recently held talks with Conrad Grodd, the company's VP of Investor Relations. 
  • Forte saw that Roku's adverting efforts were "modestly positively" impacted by Apple Inc's AAPL focus on privacy, while the company's ad authentication efforts have the "desired effect." 
  • Roku has also indicated that its average revenue per user, or ARPU, expansion is "yet early on," and the company's stops to shift from hardware to software is part of its long-term strategy to win the OTT space.
  • Roku reported fourth-quarter revenue of $865.3 million, up 33% year-over-year, missing the consensus of $894 million.
  • Roku ended the quarter with 60.1 million active accounts. The average revenue per user was up 43% to $41.03. Customers streamed 19.5 billion hours of content on Roku, up 15% Y/Y.
  • The Roku Channel reached over 80 million households.
  • Roku's Q1 revenue forecast totaled $720 million, below the consensus of $748.5 million.
  • Price Action: ROKU shares closed higher by 4.17% at $125.54 on Tuesday.

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