Analysts see attractive risk-reward in Roku after management conversations

By Senad Karaahmetovic

Susquehanna analysts reiterated a Positive rating on Roku (NASDAQ:) stock and a $75 per share price target.

The analysts recently met with the company’s management as they continue “to view the risk-reward as attractive.”

“ROKU’s 1Q outlook factors in continued M&E weakness, and we view the undemanding 2023 consensus estimates of 5% y/y Platform revenue growth as assuming M&E softness through the year. Despite this, ROKU management remains bullish on the opportunity over the mid- to long-term,” analysts said in a client note.

According to them, the management believes their online video streaming platform is “very well-positioned to capture budgets from streaming platforms aiming to reduce churn and boost engagement.”

“Management believes media companies could eventually devote evergreen budgets to these objectives, in contrast to the more typical launch budgets associated with the rollout of a new streaming service tier or specific programming,” analysts added.

Roku shares are up almost 1% in pre-market Tuesday while trading +61.5% year-to-date.