Roku has spiked almost 300% this year — and a Wall Street analyst just said it could rally another 30%

Reuters / Brendan McDermid
  • RBC Capital Markets analyst Mark Mahaney upgraded Roku’s rating to “outperform” from “sector perform,” and boosted his price target to $US155 from $US107.
  • The analyst sees about 30% upside for the shares thanks to Roku’s “favourable positioning as one of the best plays on ad-supported OTT.”
  • Shares of Roku climbed as much as 6.8% on the news, bringing the stock’s year-to-date rally to nearly 300%
  • Watch Roku trade live on Markets Insider.

Roku’s shares have surged almost 300% in 2019 – and they could rise another 30%, according to RBC Capital Markets analyst Mark Mahaney.

Mahaney on Friday upgraded Roku to “outperform” from “sector perform” and increased his price target to $US155 from $US107. He cited the company’s attractive valuation amid a recent pullback in the shares.

Roku’s shares are currently trading about 30% below recent highs, which makes from an attractive entry point into the stock, Mahaney said. He also added that Roku has “favourable positioning as one of the best plays on ad-supported OTT.”

Roku’s unique positioning comes from its aggregation model. The company sells Smart TVs and streaming players that allow customers to access a huge slate of direct-to-consumer platforms like Netflix and Hulu.

Bullish analysts have argued that as more services roll out from Disney,AT&T, and Apple in the coming months, Roku stands to benefit by acting as a distributor.

“It should serve as a highly effective customer acquisition channel for new OTT launches and offerings given its 31MM active accounts,” Mahaney said in a note to clients on Friday.

Read more: Nobel laureate Robert Shiller forewarned investors about the dot-com and housing bubbles. Now he tells us which irrational market behaviours have him most worried.

Roku stockMarkets Insider

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.