Roku Rises As Active Users Top 50 Million, Streaming Hours Surge In 2020

Talking about the COVID-19 pandemic, the executive said he wasn't certain "when we will get back into our offices, but we will. We will continue to operate in a similar way we were before the pandemic."

ROKU REMAINS A TOP IDEA FOR 2021

In a research note following the announcement, Benchmark analyst Daniel Kurnos noted that the streaming hours of 17 billion and The Roku Channel households reaching 61.8 billion were both better than expected. Kurnos admitted, however, that in-line results could pressure the shares given the "extremely elevated" expectations, but he continues to call out expectations for Platform upside.

Kurnos would be a buyer of Roku on any incremental weakness. Roku remains one of his top ideas for 2021, with a Buy rating and $410 price target.

TARGET UPPED TO STREET-HIGH AT WELLS

On Tuesday, Wells Fargo analyst Steven Cahall raised the firm's price target on Roku to $414 from $275, while keeping an Overweight rating on the shares. The new price target is a high on the Street, according to Bloomberg. Cahall sees a "big runway" for the company's average revenue per user in 2021 and beyond, driven by ad-supported video on demand.

2020 showed a "big push" into ad-based video on demand as media companies launched more services, added more high-value content, and ad agencies got more accustomed to connected TV as a dedicated marketing channel, he contended. The analyst added that Roku's deal for Quibi content is "supportive of better ARPU growth."

Deutsche Bank analyst Jeffrey Rand also raised his price target on Roku to $400 from $260 and kept a Buy rating on the shares. The analyst has become more positive on the short- and near-term outlook for Roku's Platform business.

Streaming momentum continues and advertising spend for connected TV appears to be holding up during the pandemic, Rand told investors in a research note. The analyst now believes that Roku is likely to outperform its fourth quarter outlook, and sees signs that the momentum toward streaming is continuing, on both the consumer and advertising sides.

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