Video streaming device maker and platform Roku Inc (NASDAQ:ROKU) had been one of the best-performing stocks this year due to its impressive growth in recent quarters. In a new development, the Roku stock experienced another impressive rally on Monday and jumped by as much as 10% as investors piled on to the stock following bullish comments from an analyst.
What Are Analysts Saying?
Ziv Israel, who is an analyst at Bank of America, sent out a highly bullish note with regards to Roku and that seems to have triggered the rally. In the same note, Israel stated that the bank is going to initiate coverage on the stock and also rated the stock as a ‘buy’.
A few weeks back the Roku stock had suffered a bit of a slump due to the emergence of competition in the streaming devices market. The new product from Comcast, which is also going to be given away for free to internet-only customers, had created some pessimism in the market.
However, Israel believes that the potential of the competition is being overstated at this point. He said that Roku has a competitive advantage by virtue of its operating system for streaming and in addition to that Comcast’s free offering could end up costing customers more.
Citing these factors, the analyst went on to classify the Roku stock as a ‘buy’ and set the 12-month target price at $154. That being said, it is important to keep in mind that the streaming industry and the whole market by extension, are changing at a rapid pace. Tech giants like Apple are entering the free and it is not completely inconceivable that they are going to come up with their own devices.
The company has projected Q3 2019 revenues to be in the range between $250 million and $255 million. If the company manages to generate $252.5 million (midway), then it would reflect year on year growth of 46%.
The stock has soared over 45% since the beginning of October. Moreover, the stock is just 17% away from its all-time high of $176.55.