7 Reasons Why Roku's Stock Can Rise To $500

Roku Inc ROKU was a big winner in 2020 and the stock has multiple catalysts ahead that can lift the stock even higher, according to BofA Securities.

The Roku Analyst: Ruplu Bhattacharya maintains a Buy rating on Roku's stock with a price target lifted from $380 to $500.

The Roku Thesis: The case for turning incrementally bullish on Roku's stock is based on seven catalysts, Bhattacharya wrote in a note.

Related Link: Why Roku Could Still Have 'Significant' Advertising Growth Ahead

1. An ongoing shift of advertising dollars away from traditional linear TV to over-the-top streaming platforms.
2. Roku's 2019 acquisition of DataXu (rebranded as OneView) allows the company to offer guarantees to advertisers and command a higher ad cost.
3. Roku will continue focusing on international expansion in 2021, especially in key markets like the U.K. and Brazil.
4. Management's investments in content makes the platform more attractive to consumers and advertisers. Most recently, Roku added HBO Max and Peacock and new content through the acquisition of Quibi.
5. Streaming platforms grow in importance for content makers looking to launch their movies and other content.
6. Roku's platform that is built for televisions results in lower costs versus other operating systems.
7. Roku boasts superior brand recognition.

ROKU Price Action: Shares of Roku were trading higher by 0.8% at $426.62.

(Photo: Roku)