Roku (NASDAQ:ROKU) is set to experience accelerated revenue growth, according to analysts at Guggenheim, who upgraded the stock from Neutral to Buy. The firm has placed a 12-month price target of $75. The company’s shares are currently up more than 12% intra-day.
Guggenheim credits Roku's strategic initiatives for the anticipated revenue boost, particularly the expansion of video inventory advertising sales through third-party demand-side platforms and improved monetization of its home screen. These actions are expected to enhance Roku's top-line growth story for 2025, with financial estimates above current consensus for 2024 and 2025.
While past concerns centered on Roku's slower execution in capitalizing on its strong position in the connected TV market, Guggenheim sees the company's leadership team—headed by Roku Media President Charlie Collier and CFO Dan Jedda—as pivotal in improving monetization and ensuring disciplined performance over the next three to six months. This shift in execution is projected to boost investor confidence and position Roku for sustained long-term growth.
Despite competition in the advertising and connected TV sectors, Guggenheim remains optimistic that Roku will advance toward its goal of achieving a 15% normalized OIBDA margin by balancing revenue growth with cost management. In summary, Guggenheim views Roku's strategic efforts as crucial drivers of future growth, with the potential to generate significant upside for investors.