Roku Stock Rises on Upgrade from Guggenheim
Guggenheim Raises Rating, Sets Price Target of $119
Guggenheim Securities upgraded Roku (ROKU) stock to "buy" from "neutral" on Friday and raised its price target to $119 from $85.
Key Takeaways:
- Guggenheim cites Roku's strong streaming platform and advertising business.
- The upgrade comes after Roku reported better-than-expected quarterly results.
- Roku shares are up over 5% in premarket trading.
Analyst Commentary
Analyst John Blackledge said in a note to clients that Roku's "platform strength and advertising leverage" make it a compelling investment.
Blackledge noted that Roku's active account base has grown to over 60 million and that its average revenue per user (ARPU) is rising.
Recent Performance
Roku shares have been on a tear lately, rising over 30% in the past month.
The stock got a boost last week after Roku reported better-than-expected quarterly results.
The company reported revenue of $764 million, up 18% year-over-year, and adjusted EBITDA of $240 million, up 23% year-over-year.
Outlook
Guggenheim is bullish on Roku's long-term prospects.
Blackledge said that Roku is "well-positioned to benefit from the continued growth of streaming video."
He added that Roku's "advertising business is also a key growth driver" for the company.
Conclusion
Guggenheim's upgrade of Roku stock is a sign of confidence in the company's long-term prospects.
Roku is a leader in the streaming video market and its advertising business is growing rapidly.
Investors may want to consider buying Roku stock while it is still trading at a discount to Guggenheim's price target.
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