Roku Rallies On Bullish Analyst Projection For 125M Subscribers

Roku Inc ROKU shares traded under $60 in March.

They've been on a tear since then, hitting a 52-week high of $176.55 this month, and sell-side analysts have been raising their estimates for the streaming video stock. 

The Roku Analyst: Citi analyst Jason Bazinet reportedly initiated coverage of Roku with a Buy rating and $180 price target. 

The Roku Thesis: Roku's growth will take the platform from 43 million to 125 million subscribers, Bazinet said in an initiation note. 

The analyst highlighted “healthy growth in AVOD hours,” referring to Roku’s strength in advertising revenue.

Roku’s revenue per account will increase to $32 in 2022, up from $23 in 2019, he said.

Roku’s second quarter saw average revenue per user of $24.92, an increase of 18%.

An active Roku account will have an economic value of $180 in 2022, up from $115 in 2019, Bazinet said. 

ROKU Price Action: Roku shares were up 8.11% at $159.75 at last check Wednesday. 

Benzinga’s Take: The $180 Citi price target follows several Roku analyst moves in August. 

Earlier this month, Berenberg increased its Roku price target from $145 to $181.

Prior to that, Deutsche Bank initiated coverage with a Buy rating and $185 price target. 

Berenberg cited strong advertising growth, while Deutsche Bank pointed to high-margin connected televisions.

The company ended the second quarter with 43 million active accounts, gaining 3.2 million in the quarter.

Photo courtesy of Roku.