Roku Shares Jump After Q3 Delivers Many Positives: 7 Analysts Tune Into Into Print, Guide

Roku Inc ROKU shares climbed in early trading on Thursday, after the company reported strong quarterly results.

The results came amid an exciting earnings season.

Here are some key analyst takeaways from the earnings release.

BofA Securities On Roku

Analyst Ruplu Bhattacharya maintained a Buy rating while raising the price target from $90 to $93.

“Roku delivered another strong quarter across key metrics” and with many positives, Bhattacharya said in a note. “Roku continues to benefit from a cyclical recovery in Advertising,” he added.

Roku’s Platform revenues grew 18% year-on-year, “driven by strength in both content distribution and video advertising,” the analyst further stated.

Macquarie Equity Research On Roku

Analyst Tim Nollen reiterated an Outperform rating and price target of $93.

“Roku reported an impressive 3Q beat, growing revenue 20% to $912m and turning positive on adj. EBITDA,” Nollen wrote in a note. “Fundamentals are strengthening,” he added.

Device sales accelerated and Roku’s active accounts increased by 2.3 million to hit 75.8 million, while ARPU rose 1% sequentially, the analyst stated.

Oppenheimer On Roku

Analyst Jason Helfstein reaffirmed an Outperform rating while cutting the price target from $110 to $100.

Roku’s opex reductions began to “roll through the model” and the new CFO is expected to “continue the focus on opex in 2024,” Helfstein said.

“While M&E headwinds persist, Platform revenue was up 18% y/y, 3%/5% ahead of Opco/Street, vs. 2Q's +11% on content distribution, video ads and positive 606 benefit (200bps),” the analyst wrote. “Platform gross margin of 56% exceeded our 51% and 2Q's 53%,” he added.

Check out other analyst stock ratings.

Needham On Roku

Analyst Laura Martin maintained a Buy rating and price target of $100.

“Roku reported strong 3Q23 rev of $912mm (up 20% and 7% above our est), Adj EBITDA of $43.4mm (much better than our loss est of $30.8mm),” Martin said. While Device revenues grew 33% year-on-year to $125 million, Platform revenues grew 18% year-on-year to $787 million, she added.

The company “reported ad rev/HH is being negatively impacted by a mix shift toward Mexico, U.K., and non-U.S. territories that are less mature (ie, lower CPMs) than the U.S.,” the analyst added.

Wedbush On Roku

Analyst Alicia Reese reiterated an Outperform rating and price target of $100.

“Despite ongoing macroeconomic headwinds and a weak advertising business, Roku continues to beat expectations,” Reese wrote in a note. “The company returned to profitability after cutting expenses, and guided to positive EBITDA in Q4 and 2024,” she added.

“Roku has continued to show meaningful and growing share gains as ad dollars continue to shift from linear TV to digital connected TV (“CTV”),” the analyst further stated.

Stephens On Roku

Analyst Nicholas Zangler reaffirmed an Overweight rating and price target of $105.
“3Q23 revenue increased +19.8% yoy to $912.0 mil., well above consensus of $856.0 mil,” Zangler wrote. “The platform segment increased +17.9% to $786.8 mil. vs. consensus calling for +12% growth,” he added.

“Active accounts reached 75.8 mil., ahead of consensus of 75.3 mil,” the analyst stated.

He further mentioned Roku’s gross profit of $434.8 million was significantly higher than the consensus estimate of $369.6 million.

William Blair On Roku

Analyst Ralph Schackart maintained an Outperform rating on the stock.

“Roku surpassed 100 billion streaming hours for the first time on a trailing 12-month basis,” Schackart wrote in a note.

“Globally, Roku viewers streamed 26.7 billion hours in the third quarter, equating to roughly 3.9 streaming hours per active account, per day, up roughly 5% year-over-year,” the analyst said.

ROKU Price Action: Shares of Roku jumped 29.87% to $77.53 at the time of publication Thursday.

Read Next: Will Volatile Consumer Spoil Apple's Party? Q4 Earnings Preview

Photo: Shutterstock