Guggenheim Reiterates Roku (ROKU) at Buy on Amazon deal, 'positive for Roku'

Guggenheim analyst Michael Morris reiterated a Buy rating and $100.00 price target on Roku Inc. (NASDAQ: ROKU).

The analyst commented: "Roku and Amazon today announced a new partnership leveraging Roku’s viewer data and CTV inventory and Amazon’s demand-side advertising platform (DSP) to further strengthen the performance of Connected TV (CTV) advertising campaigns (Press Release). We see the collaboration as positive for Roku and aligned with our August 2024 upgrade to BUY (8/23 - Upgrade Note) that senior leadership would drive incremental initiatives to drive expanded monetization of the company’s video inventory and user data. Of note 1) partnership between Amazon and Roku contradicts a bear case that Amazon’s growth will be at Roku’s expense; 2) Roku now has established partnerships with the four largest DSPs, three of which (Amazon, Alphabet and The Trade Desk) are considered competitors in some facets as the CTV marketplace continues to develop; 3) the Amazon partnership should provide growth drivers for two areas where Roku’s operations have led monetization – CTV inventory and opted-in consumer data; 4) we believe that the ‘exclusivity’ element of the agreement pertains to the ability to use first-party Roku viewer data for targeting across inventory purchases (beyond Roku’s first party inventory) – we expect Roku is incrementally benefitting from making this data available, and it is unclear for how long the exclusivity period will extend. We expect the partnership to begin contributing to Roku economics in early 2026 with growth ramping throughout the year as buyer awareness, adoption and performance progresses. Our current 2026 Platform revenue growth estimate is 13% (unchanged), ahead of consensus 12%, reflecting our confidence in execution on growth opportunities."

For an analyst ratings summary and ratings history on Roku Inc. click here. For more ratings news on Roku Inc. click here.

Shares of Roku Inc. closed at $82.17 yesterday.

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