Roku Inc. (NASDAQ:ROKU) stock has struggled over the last year with shares down over 80%. Ark Invest, led by Cathie Wood, remains heavily invested in the streaming platform and hardware maker.

The stock could be a big winner by the year 2026, Wood says. Here’s a look at the thesis and what shares could be worth in four years.

What Happened: San Jose, California-based Roku will grow over the next four to five years due to gains in video advertising among streaming companies, according to Ark Invest's thesis.

The firm has a price target of $605 by 2026 with a bear case of $100 and bull case of $1,493.

Ark points to active accounts, daily hours streamed, percent of hours streamed on ad-supported video-on-demand (VOD) platforms and gross and net platform monetization rates as the four most important items for Roku’s growth and potential share price.

Roku saw shares dropped after it reported that second quarter revenue and earnings per share were shy of Street estimates. Second quarter revenue of $764.4 million was up 18% year-over-year. The company cited a slowdown of television advertising spend due to macro-economic issues in the second quarter.

“We expect these challenges to continue in the near term as economic concerns pressure markets worldwide,” the company said.

Roku ended the second quarter with 63.1 million active accounts, adding 1.8 million accounts in the second quarter.

Wood, meanwhile, praised Roku after the second quarter earnings results.

“Although macroeconomic headwinds are compelling advertisers to tighten their ad budgets, we believe ad spend on CTV should continue to grow as consumers defect from linear TV,” Wood said.

Third quarter guidance from Roku could be conservative after strong advertising commitments at the upfront selling season, Wood explained.

“As the #1 streaming platform by hours streamed in the U.S., Canada and Mexico, Roku should continue to lead the advertising shift from linear to digital TV.”

Roku is one of the largest Ark Funds holdings. The stock is the number three holding at 7.2% of assets in the Ark Innovation ETF (NYSE:ARKK), representing $574.6 million in assets. The stock is the second largest holding in the Ark Next Generation Internet ETF (NYSE:ARKW) at 7.6% of assets, representing $101.7 million in assets. Roku is also held in the Ark Fintech Innovation ETF (NYSE:ARKF) with $9.3 million in assets as the 26th largest holding representing 1.1% of assets.

Related Link: How Much $100 In Bitcoin Could Be Worth In 2030 If Cathie Wood's Price Prediction Comes True

Investing $1,000 in Roku: Wood accurately predicted the future price of Tesla Inc. (NASDAQ:TSLA) years ago. She had one of the highest price targets among analysts and experts on the electric vehicle company and aggressively bought shares.

If investors think Wood and Ark Funds are right about Roku, they could see similar gains in the future:

Image: Roku.com