Streaming content provider Roku (ROKU) - Get Report on Wednesday received an out-of-the-gate buy rating from analysts at Deutsche Bank, who expect users will continue to tune in to the platform amid the pandemic.
Deutsche Bank analyst Jeffrey Rand initiated coverage of Roku with a buy rating on the stock and a one-year price target of $185, less than a week after the streaming-media company posted better-than-expected revenue for its most recent quarter.
In its quarterly earnings results released last week, Roku said users streamed 14.6 billon hours of content in the second quarter, helping it post better-than-expected revenue despite weakness in the television advertising market.
The Los Gatos, California-based company reported second-quarter revenue of $356.1 million with an adjusted net loss of 35 cents a share. Analysts were expecting the company to report revenue of $312 million with an adjusted net loss of 50 cents a share.
While Roku does not expect television ad spending to return to previous levels “well into 2021,” it remains confident in its ability to grow its ad business over the long term, albeit at a slower pace than was expected prior to the pandemic.
That’s enough for Deutsche Bank and others to express confidence in the company’s outlook. Analysts at Susquehanna last week raised their price target on Roku shares to $185 from $145, while analysts at Needham & Co. lifted their price target to $190 from $150.
Shares of Roku were up 3.56% at $151.62 in trading on Wednesday. The company's stock soared more than 300% in 2019.