KeyBanc Capital Markets turned incrementally bullish on Roku Inc (NASDAQ: ROKU) after first-hand checks point towards an acceleration in growth.
KeyBanc's Evan Wingren maintains an Outperform rating on Roku with a price target lifted from $63 to $76.
KeyBanc's Key First Look database of more than 13,000 shows Roku's platform customer base rose 79 percent year over year through March 17, Wingren said in a research report. This marks an acceleration from 64 percent growth seen in the fourth quarter.
The checks suggest acquisition and engagement within the Roku platform remains strong and higher user interaction represents a "bullish sign for the value of the platform," according to the analyst. Roku continues to improve its monetization initiatives through a recently announced a partnership with Adobe Inc (NASDAQ: ADBE), which will combine Roku's first-party data with Adobe's customer data.
Meanwhile, Apple Inc. (NASDAQ: AAPL)'s recent push into the streaming video market will likely have a minimal impact on Roku given a low slate of original content and a focus on repackaging of existing content.
Bottom line, Wingran says Roku's strong reach, data and ad stock are likely to continue attracting premium monetization rates compared to "linear and lower quality" over-the-top inventory elsewhere.
Roku traded higher by 6.5 percent to $68.71 per share Monday morning.
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Roku Gains Support, Needham Names Stock 'Top Pick' For 2019
Photo courtesy of Roku.
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