Roku stock could jump 22% to $ 375, analyst says
Actions of Roku (NASDAQ: ROKU) have already jumped 129% so far this year, but will reach new all-time highs in 2021.
That’s according to Citi analyst Jason Bazinet. On Wednesday, Bazinet raised its 12-month price target for Roku stock from $ 220 to $ 375, the highest among its Wall Street peers. His new target represents potential gains for investors of around 22% from the stock’s closing price on Tuesday of around $ 306.
Bazinet cited several catalysts that he says will drive Roku’s action upwards over the coming year. The streaming deal Roku made with Discovery to distribute its Discovery + streaming service, as well as an expected agreement for AT&T‘s HBO Max will cause an additional hike for the stock. The analyst also believes that Roku’s international expansion will continue to gain traction.
Roku stock has already gained 380% from its March lows, which Bazinet acknowledges. He notes that blessing Roku with the highest price target of any Wall Street analyst “gives us a break.”
Will Roku’s share price hit $ 375?
Evidence suggests that Bazinet might underestimate the potential. Roku’s third-quarter revenue was up 73% year-over-year, mostly thanks to platform revenue which jumped 78%. This is Roku’s most profitable segment, consisting of advertising, the Roku channel, and licensing of the Roku operating system to smart TV makers.
Streaming technology company The strong and engaged user base continues to accelerate, with Roku’s active accounts reaching 46 million, an increase of 43%, while streaming hours on its platform have jumped 54% to 14.87. billion.
Given the impressive gains from these key metrics, the potential for Roku’s shares to climb significantly from here is not only possible, but probable. In fact, a 22% increase in the coming year may well prove prudent.
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