Roku Inc. (ROKU) Earnings Preview, Rosenblatt Sees 5 Reasons to Buy Today

Rosenblatt analyst Mark Zgutowicz reiterated a Buy rating and $560.00 price target on Roku Inc. (NASDAQ: ROKU) suggesting investors hold shares into the report this Thursday night for 5 reasons:

1) the audience development segment is nearing inflection, and returns here compare favorably to Roku's majority video ads mix at a ~50% margin

2) Apple + Google privacy updates = more digital $$$ to CTV. Social media buyers are taking advantage of Roku's attractive relative effective CPMs, and there's no reason this broader demo of digital buyers shouldn't follow fast.

3) TRC engagement/monetization bursting at the seams. The Roku Channel (TRC) reach/engagement appears to be toppling other AVOD, reaching 60M+ individuals exiting 2020 in households that own a Roku device or TV. And its steadily growing exclusives (a.k.a. Roku Originals) --including Quibi's 75+ titles (opening the Gen Z demo) and popular DIY home remodeling brand This Old House-- is forcing its peers down the same path.

4) OUS yet to be priced into stock, expect tangibles here soon. As mentioned above, we would not be surprised to see OUS revenue and active accounts segmented this quarter (or at latest 2Q), which will make tangible the path to monetization on a country-by-country basis.

5) Acquired Nielsen ad tech still grossly underappreciated.

He stated "We expect strong results from Roku's Thursday night print, focusing on US ARPU relative to active accounts as its 50M+ targeted household reach is well in front of any other platform in the market. In addition, we believe there is a good chance that OUS revenue/active accounts are segmented for the first time, including country-level contribution."

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 $335.31 yesterday.

You May Also Be Interested In

• Growth isn't weak enough to truly undercut inflation pressures - BMO
• Banner Corporation (BANR) PT Lowered to $51 at Piper Sandler
• Yageo Corp. (2327:TT) (YAGOY) PT Lowered to NT$656 at HSBC