Roku Inc.’s (ROKU) stock took off on Thursday after Macquarie analyst Tim Nollen boosted the price target from $72 to $90. This optimistic outlook stems from the Roku Channel’s impressive performance, capturing 1.7% of television time, and the company’s clever strategies to capitalize on its 84 million active accounts.
Nollen points to Roku’s newly launched self-service Ads Manager as a game-changer for attracting smaller advertisers. This user-friendly platform empowers businesses to reach targeted audiences on Roku, featuring innovative features like shoppable ads that enable consumers to make purchases directly using their Roku remote.
The analyst emphasizes the strength of Ad Manager’s CPM pricing strategy, which provides a buffer against pricing pressures faced by premium streaming platforms like Netflix and Disney+. Adding to the positive outlook, recent subscription price increases across streaming services hosted by Roku offer an additional catalyst for revenue growth. Macquarie anticipates a robust revenue growth rate of 14% to 15% in both fiscal years 2024 and 2025.
The market has responded favorably to these developments, with Roku shares experiencing a surge of over 15% in the past month and currently trading above the 50-day moving average of $65.05.
Roku shares closed Thursday’s session at $75.45, marking a 1.71% increase. This strong performance reflects the market’s confidence in Roku’s strategic initiatives and its ability to capitalize on the evolving streaming landscape.
