Wedbush Upgrades Roku Inc. (ROKU) to Outperform
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(Updated - April 29, 2021 7:23 AM EDT)
Wedbush analyst Michael Pachter upgraded Roku Inc. (NASDAQ: ROKU) from Neutral to Outperform with a price target of $475.00.
The analyst commented, "We are upgrading shares of ROKU to OUTPERFORM from NEUTRAL, as Roku continues to benefit from accelerated user expansion during the pandemic, a secular shift from linear TV to OTT, and the beginnings of international expansion. We expect advertisers to continue their migration from linear TV to over-the-top on-demand, where Roku is a primary beneficiary as it has dominant market share, a rapidly growing user base, and superior targeting capabilities. We maintain our $475 price target, which reflects a 13x EV-to-Revenue on our 2023 revenue estimate. Our revenue multiple reflects our view that the pace of growth is sustainable given the bulk of advertising still occurs on linear TV and will continue to shift in Roku’s direction, as content continues to shift to SVOD, PVOD, and AVOD platforms, and as Roku is only in the early stages of its international expansion. While Roku’s share price is likely to remain volatile as expectations are high against a rich valuation, we think the recent pullback provides an attractive entry-point."
Shares of Roku Inc. closed at $357.74 yesterday.
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