That positivity is based on year-over-year advertising spending growth that was above expectations.
And that growth stemmed from an aggressive push among TV buyers to buy up as much over-the-top inventory as possible, the analysts said.
Analysts at Truist upgraded the stock to buy from hold on strong fundamentals.
The firm cut its share-price target to $367 from $480, however, reflecting the stock’s recent decline.
“We see upside to platform gross profit,” Truist analyst Matthew Thorton wrote in a commentary.
“Our model is 4%/11%/4%/7% above consensus 1Q/2Q/2021/2022, similar for platform revenue and Ebitda,” the analyst wrote. He sees numbers in line with consensus for number of accounts and hours watched.
“Catalysts could include TCL Roku TVs in UK/Brazil and progress with linear addressable,” Thornton said. Roku “could add low-hundreds-of-millions gross profit,” he said.
Roku shares dropped 13% in March after the company said it planned to sell up to $1 billion of shares in at-the-market offerings. The sale plan came after it said it agreed to buy Nielsen's Advanced Video Advertising business as part of its long-term plan to boost its digital-advertising revenue.
Roku has quadrupled over the past year amid investor enthusiasm for streaming-related companies and its surprise fourth-quarter profit.
At last check shares of the San Jose, Calif., company were up 2.8% to $334.76.