Connected television and streaming platform company Roku Inc (NASDAQ:ROKU) beat revenue and earnings per share estimates in the fourth quarter. Here's a look at what analysts are saying about the report and the company's path moving forward.
The Roku Analysts
Benchmark analyst Daniel Kurnos has a Buy rating and raises the price target from $63 to $89.
Stephens analyst Nicholas Zangler has an Overweight rating and a price target of $70.
Oppenheimer analyst Jason Helfstein has an Outperform rating and raises the price target from $75 to $85.
Raymond James analyst Aaron Kessler has a Market Perform rating and no price target.
Rosenblatt analyst Barton Crockett has a Neutral rating and raises the price target from $44 to $76.
Needham analyst Laura Martin has a Buy rating and raises the price target from $65 to $80.
KeyBanc analyst Justin Patterson has an Overweight rating and a price target of $72.
Related Link: Trading Strategies For Roku Stock Before And After Q4 Earnings The Analyst Takeaways
Benchmark: Kurnos said Roku crushed fourth quarter expectations and provided a first quarter outlook that could have some skepticism.
"We can understand why many of our peers reacted with open skepticism, which we think highlights how far out of favor Roku has fallen," Kurnos said.
The analyst said it's hard to argue that Roku didn't gain market share in the fourth quarter and could have a chance to gain more in the future.
"Roku has a chance, in our view, to prove that they have substantially more value in the ecosystem than most give them credit for."
Stephens: Zangler called the fourth quarter results a significant beat by Roku.
"Roku continues to insulate consumers from price increases with the intent of driving increased users to the platform," Zangler said.
The analyst also noted that the Roku OS came embedded on 38% of all TVs sold in the U.S. in the fourth quarter and on 30% of TVs sold in Canada and Mexico.
Oppenheimer: Helfstein expects Roku to focus on the preferences of the company's largest advertisers moving forward with more of a focus on direct integrations.
"Given mgmt's track record of conservative guidance, we think investors will look past weaker1Q revenue guidance," Helfstein said.
Advertising strength and the success of The Roku Channel were two highlights for the analyst in the fourth quarter.
"We believe Roku can leverage its advantages in pricing and merchandising to remain the market leader in consumer-facing connected television solutions. Roku should benefit from the secular trend of advertising dollars leaving linear TV in favor of OTT platforms."
Raymond James: Roku showed strength in accounts added and streaming hours int the fourth quarter, according to Kessler, who says first quarter guidance could be conservative from the company.
"While we remain positive on the long-term fundamentals (large TAM, market leading TV OS, international growth opportunity), we maintain our Market Perform rating as we believe overall macro headwinds remain, and we believe meaningful EBITDA profits are still a ways off," he said.
Roku's guidance said it would hit positive EBITDA in 2024.
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