Roku (ROKU) - Get Report was up 5.8% to $99.06 in trading Wednesday after the stock was upgraded to buy from neutral by analysts at Guggenheim.

The firm also bumped its price target significantly to $119 from $75, representing a more than 23% upside from the stock's opening price Wednesday of $97.30. The new price target is based on a 5 times multiple of the firm's 2023 platform segment sales estimate of $2.8 billion. 

"We see continued growth in account and streaming metrics, closing of the video advertising pricing gap with traditional television, demand by third parties for audience development opportunities, and incremental content distribution revenue recognition as key catalysts for shares," analyst Michael Morris wrote. "We recognize the heightened risk associated with the company's high relative valuation but believe that at its current $10.6 billion market capitalization, Roku's asset value is compelling given its strong and growing household penetration."

Morris said he sees Roku as one of the only pure-play streaming video companies, making in uniquely well positioned to benefit from continued audience cord cutting. The firm also estimates that 32% of total streamed hours on Roku are available for video advertising monetization. 

Roku has been one of the hottest stock of the year, climbing 225% since the start of the year. 

Behind the Stream:

A History of Roku