UPDATE: Stephens Upgrades Roku Inc. (ROKU) to Overweight
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Stephens analyst Nicholas Zangler upgraded Roku Inc. (NASDAQ: ROKU) from Equal Weight to Overweight with a price target of $475.00 (from $400.00).
The analyst comments "While Roku handily beat expectations for revenue, ARPU, gross profit, adj. EBITDA and net income, investor hyper- focus on a miss in active account growth and streaming hours could potentially pressure the stock near term. Our overarching thesis is that all linear TV ad spend will shift to connected TV, driving $9 bil. in connected TV ad spend to $72 bil. over time. In addition, we expect performance marketers, that currently spend $134 bil. across search and social advertising platforms, to divert ad spend into the CTV channel as new technologies have enabled measurement and attribution on the big screen. Given the effectiveness of TV advertising and emergence of interactive and dynamic advertising, we see premium inventory CPMs increasing from $25 currently to $50 - $75 in the coming years. We are assigning an Overweight (Vol.) with a $475 PT, based on a 130x F22 EV/EBITDA multiple."
Shares of Roku Inc. closed at $420.32 yesterday.
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