Roku stock is nearing even the most bullish analyst price targets. Citigroup analyst Jason Bazinet thinks the run can continue.
Bazinet in a note on Sunday raised his price target on the stock (ticker: ROKU) to $460 a share, from $375 a share. He ended September with a $220 target. His new target is higher than any other price target listed by FactSet, and implies 15% upside from recent levels. The mean price target is $302.15, according to FactSet.
Last week, Roku said it had reached a deal to add dozens of shows from the defunct Quibi streaming platform to the Roku Channel. That’s Roku’s own channel that offers shows and movies free to users, with advertisements.
“We like the Quibi acquisition,” Bazinet wrote. “Our back-of-the-envelope math suggests each active account has to watch 0.5% of Quibi’s entire library for Roku to break even. We believe any consumption above these levels will result in incremental value for Roku shareholders.”
Roku stock has soared about 200% in the past 12 months. The company said it added 14 million active accounts in 2020, as the pandemic kept folks at home, streaming shows like “Tiger King” and “The Queen’s Gambit.”
While advertising spending has been affected by the pandemic’s hit to travel and leisure companies, bulls expect that to bounce back in the coming year. When that happens, Roku has millions of new users to monetize.
Bazinet sees momentum, following last week’s announcement that the company ended the year with 51.2 million active accounts, up from 46 million at the end of the third quarter. He expects that momentum to continue into 2021.
Roku stock was up 2%, to $407.10, shortly after the market opened on Monday. The S&P 500 index was down 0.6%.
Write to Connor Smith at [email protected]
