Roku: The 'Arms Dealer' Of Streaming Gears Up For Monetization Surge, Says Analyst

Roku Inc. ROKU is gearing up for a platform monetization sprint, and investors are starting to tune in. After a strong showing at the JPMorgan U.S. All Stars Conference in London, Roku's management has made one thing crystal clear: it's all about accelerating platform revenue growth.

Shopify Integration Boosts Roku Ads Manager

Roku has launched Roku Ads Manager, a self-service CTV performance solution featuring the first-ever Shopify Inc SHOP integration for shoppable campaigns. This new platform is designed to help direct-to-consumer brands of all sizes easily purchase CTV video ads, offering a familiar buying experience similar to search and social.

Louqman Parampath, Roku's VP of Product Management, emphasized the platform's advantage: "Roku Ads Manager is uniquely positioned to offer data, optimization, and ad formats that no other CTV self-serve solution has." The integration with Shopify enhances reach for merchants, creating a new sales channel with shoppable ads.

Roku Management Doubling Down On Partnerships

With management doubling down on third-party partnerships and home screen changes, the streaming giant is eyeing a revenue boost that could turn heads as early as the fourth quarter of 2025. Partnerships with The Trade Desk Inc TTD are also nearing completion, positioning Roku for potential ad revenue growth.

While Roku's CFO Dan Jedda and IR head Conrad Grodd laid out the company's priorities, the spotlight was on how Roku plans to balance revenue expansion with profitability. With platform growth initiatives set to be funded by reallocating existing operational expenses (nearly $2 billion in 2024), Roku is aiming to keep its spending lean.

This belt-tightening has led JPMorgan's Cory Carpenter to raise his price target on Roku from $80 to $90, citing increased confidence in the company's ability to grow earnings without breaking the bank.

Needham’s $100 Price Target Adds More Fuel To The Fire

Adding to the optimism, Needham has upgraded Roku’s price target to $100, reiterating their Buy rating. Analyst Laura Martin emphasized Roku’s strong strategic position in the U.S. over-the-top (OTT) and connected-TV (CTV) ecosystems.

With Roku devices now in 50% of U.S. broadband homes, the company is the largest streaming distribution platform, making it highly attractive to advertisers.

According to Needham, Roku benefits from a total addressable market (TAM) of around $62 billion in traditional linear TV advertising revenue for 2023. Roku's impressive cost control and tactical moves to become an “arms dealer” of streaming—similar to how Apple's iOS platform operates—reinforce Needham's bullish outlook.

This potential, combined with its large CTV ad inventory and projected industry growth of 15-17% in 2024, paints a picture of significant valuation upside.