- Roku's Q2 ad spend held steady, supporting stronger Platform revenue.
- Frndly and Amazon DSP could add $50M+ to 2025 revenue.
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Connected TV is poised to become one of the fastest-growing advertising channels in the coming years, with Roku, Inc. ROKU well-positioned to benefit from the ongoing shift in ad spending from traditional linear TV to streaming platforms.
Against this backdrop, Roku's recent momentum and strategic positioning have prompted optimism ahead of its upcoming second-quarter earnings release on Thursday, July 31.
JPMorgan analyst Cory A Carpenter reiterated the Overweight rating on Roku, raising the price forecast from $85 to $100.
Carpenter noted Roku appears well-positioned to outperform expectations, with stable advertising spending in the second quarter and easing China tariffs providing a supportive backdrop.
The analyst pointed out that Roku chose not to raise its 2025 Platform revenue guidance last quarter, even after acquiring Frndly, potentially to leave room for macroeconomic uncertainties.
However, Carpenter now sees that approach as overly cautious and foresees Roku reflecting Frndly's estimated $40 million second-half revenue in its updated outlook.
He also highlighted the upcoming Amazon.com, Inc. AMZN DSP partnership, likely launching in the fourth quarter, as another potential boost to 2025 Platform revenue, which he believes wasn't factored into earlier guidance.
Carpenter raised his Platform revenue growth estimate to 15% for the second quarter and 14% for full-year 2025, both above Roku's official guidance of 14% and 12%, respectively.
This apart, the analyst noted that Roku's first-quarter guidance factored in some macroeconomic softness, but advertising spend held steady in the second quarter.
Per Carpenter, this stability is likely to drive a slight upside in Platform revenue.
As a result, he raised his adjusted EBITDA estimate for the second quarter from $70 million to $73 million, modestly above the company's guidance of $70 million and reflecting the expected revenue improvement.
ROKU Price Action: Roku shares are trading higher by 2.85% to $93.70 at publication on Friday.
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