Roku (ROKU) stock was up by 10% since this week began. The reason is that the stock received an analyst's optimistic forecast.
Evercore ISI analyst Mark Mahaney said that he expects Roku shares to outperform the market this year and he thinks its share price rising to $400. If Mahaney is correct, Roku investors will receive returns of around 13% based on the shares’ current price of $353.
Mahaney said the company is poised to profit as marketers shift their ad spending from traditional broadcast television to streaming and connected TV platforms. Mahaney also pointed out that the company's strong competitive position within the ad-supported video streaming market, as well as its rapidly expanding customer base.
There is a growing number of people canceling their traditional cable TV packages and replacing them with less expensive streaming services than ever before. This powerful trend is working in the company's favor. The low-priced streaming devices and smart TV operating software are increasingly becoming popular. Therefore, some advertisers are also flocking to Roku's platform, which will drive the company's revenue to grow significantly.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.