Roku Inc's (ROKU) COVID Pain Likely to Peak in 2Q - Needham & Company

Needham & Company analyst Laura Martin reiterated the price target on Roku Inc. (NASDAQ: ROKU) to $150.00 while maintaining a Buy rating on the belief that the negative impact of COVID-19 will peak in 2Q20, improving as 2020 wears on and into 2022.

The analyst stated "Our channel checks indicate that hours streamed will be strong again in 2Q20 (up 46% y/y), and we expect y/y active accounts growth (at 39% y/y) to be stronger than in 1Q20 (up 37% y/y). However, continued weakness in large digital ad categories such as autos, entertainment, and travel should slow Roku's y/y ad revs growth to up 38% y/y in 2Q, vs up 108% in 1Q. Longer-term, eMarketer now projects that brands will not commit up to $7B in the Upfront TV market, which would make these ad dollars available to Roku in 4Q20-3Q21".

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