Shares of streaming TV solution provider Roku Inc. (ROKU) have risen steadily during the COVID-19 pandemic, rising almost 165 percent since the beginning of the year. The business has been the beneficiary of forced social isolation, which has prompted the interest in streaming services to rise sharply. Some analysts say that next year’s growth will continue. Several influences point to this.
The Benchmark Company analysts increased their target price from $300 to $410 for Roku stock on December 17. This is the highest estimate on Wall Street at the moment and shows a rise of around 26 percent relative to the closing price at the time, when the stock was worth $325.82.
Roku has several growth variables, according to analysts. First of all, there is the arrangement between Roku and Discovery to distribute the service for discovery+ streaming. In addition, the shares may help by the planned agreement with AT&T regarding the broadcast of HBO Max. The expansion in the international market would also be the growth point of the streaming service.
Roku has shown solid traction so far. Revenue rose 73 percent year-on-year in the third quarter. A rise of almost 80 percent in revenue from the platform is the reason for the strong growth. This includes revenue from ads, the Roku channel, and licensing to linked TV manufacturers of the Roku operating system. The number of accounts has risen to 46 million over the last year, i.e. 43 percent year-on-year. At the same time, to 14.87 billion hours, the length of watch time rose by 54 percent.
The forecast may even be optimistic, given the high public interest in streaming services and Roku’s strong position in this market. But the stock has showed uptrend over the past week by gaining about 10 percent.
Roku Inc. (ROKU) was stable on Tuesday with a bit rise of +0.20 percent to $354.70 at ring of the bell.