Shares of Roku Inc. ROKU, -7.29% rallied 2.8% in premarket trading Wednesday, after KeyBanc Capital analyst Justin Patterson said its time to buy, saying the streaming platform for TV is redefining video monetization. Patterson raised his rating to overweight from sector weight, and established a stock price target at $518, which is 32.9% above Tuesday’s closing price of $389.67. The upgrade comes on the heels of Roku’s purchase of Nielsen Holdings PLC’s NLSN, +7.58% Advanced Video Advertising business. “Previously, Roku was capturing over 3.5 hours/day of digital viewership (although not all of it was monetizable),” Patterson wrote in a note to clients. “With the acquisition of Nielsen’s advertising assets, Roku can now monetize the other 2.5-3 hours/day on linear TV.” He said that benefits both average revenue per user (ARPU) and the company’s positioning with programmers. Roku’s stock has rallied 34.8% over the past three months, and soared 258.8% over the past 12 months. The S&P 500 SPX, -0.81% has gained 28.9% over the past year.
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