Raymond James has resumed coverage of Roku with a Market Perform rating, offering mixed prospects for the streaming platform company. The analysts highlight several factors that work in Roku’s favor, including its strong positioning in the streaming television space with a large active audience of over 70 million households. They also note the company’s exposure to the growing market of connected TV advertising, which is gaining a larger share of the $90 billion U.S. TV ad market. Additionally, Roku has multiple avenues for ad business growth, such as inventory expansion and new formats.
However, the analysts are cautious about near-term expectations due to the volatility in the ad market, particularly in certain parts of the connected TV market that Roku relies on. They also expect EBITDA losses for the company until its cost structure rationalization takes effect in the coming year. Raymond James has given Roku a Moderately Aggressive Risk/Wealth Accumulation suitability rating, considering its relatively short operating history and the fluctuating trends in the ad market.
Overall, Roku has a Hold rating on Seeking Alpha’s Quant Rating system and holds an average Hold rating from both Seeking Alpha authors and Wall Street analysts.