Roku Shares Are On The Rise Today: What You Need To Know

Roku, Inc. ROKU shares are trading higher Wednesday on analyst commentary from Needham & Co., which maintained a “Buy” rating and reiterated a price target of $100. Here’s what you need to know.

What To Know: The analyst, Laura Martin, highlighted Roku as a potential acquisition target for several categories of buyers. Martin emphasized that Roku's unique data assets, installed base and pricing power make it a standout candidate in the connected TV (CTV) space. She noted that Roku, with TVs in 85 million homes as of third-quarter 2024, has a significantly larger installed base compared to Vizio's 19 million. Roku also benefits from its aggregated consumer viewing data, which has not yet been separately monetized.

Martin further pointed to Roku's pricing leverage, derived from its position as the operator of the Roku Channel, which retains 50% of ad revenues generated from third-party content. This, she said, underscores the company’s negotiating power in ad sales. Additionally, Roku's recent entry into branded TV manufacturing has gained traction, particularly after Walmart's acquisition of Vizio.

Martin stated that Roku remains the only scaled CTV platform available for acquisition, contrasting it with competitors like Amazon, Google and Samsung, whose platforms are not up for sale. She also argued that the platform's unique data and ecosystem integration position it as a valuable target for companies such as Netflix, The Trade Desk or large retail media networks like Amazon or Walmart.

The commentary comes amid broader industry shifts, including Walmart’s $2.3 billion acquisition of Vizio, finalized yesterday and Amazon's push into ad-supported Prime Video. Martin suggested that such developments could further elevate Roku's strategic importance in the market.

Roku's market cap currently stands at $10.99 billion, with a 52-week trading range of $48.33 to $108.84.

ROKU Price Action: Roku shares were up 10.1% at $83.34 at the time of writing, according to Benzinga Pro.

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