Roku: $605 per share by 2026
Roku is the most popular streaming platform in the world, both in terms of devices and viewing time. In fact, Roku holds nearly twice as much market share in both categories as the next closest competitor. That makes Roku a valuable advertising partner, and it monetizes brand relationships with OneView, an ad tech platform that allows marketers to run targeted cross-channel campaigns on connected televisions (CTV), desktops, and mobile devices.
Unfortunately, many brands have cut their ad budgets due to softening demand as people continue to battle high inflation, and that trend hit Roku hard in the third quarter. Revenue rose just 12% year over year to $761 million, and the company posted a GAAP loss of $0.88 per share, down from a profit of $0.48 per share in the same period last year.
But investors shouldn't read too much into those results. Roku's still growing faster than several other ad tech companies. In fact, Alphabet reported 3% growth in ad revenue in the third quarter, while Meta Platforms actually saw sales decline 4%. Moreover, Roku is the most popular streaming platform by a wide margin, and that positions it for strong growth as the economic climate stabilizes.
Omdia estimates online video advertising will surpass traditional television advertising this year, growing into a $259 billion market by 2026. That's the cornerstone of Ark's investment thesis. Wood assumes Roku will see approximately $10 billion in online video advertising revenue in 2026, meaning it would have about 4% market share.
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