Shares of online streaming hardware and service provider Roku (ROKU - Get Report) rose Monday after Needham & Co. analyst Laura Martin raised her price target to a 'Street High' of $150 while maintaining a buy rating on the stock.
In a report to clients, Martin noted given similar valuations among Roku's competition, in particular Netflix (NFLX - Get Report) , that Roku appears the most compelling, especially since its value proposition to advertisers is gaining traction. Martin estimates that Roku's 2019 ad revenue will be $550 million, "suggesting a long growth runway, if successful," she said.
More importantly, with the likes of AT&T's (T - Get Report) WarnerMedia, Comcast's NBCUniversal, Walt Disney (DIS - Get Report) , and Apple (AAPL - Get Report) all releasing new streaming services that will compete with Netflix, Amazon Prime, CBS All Access and Hulu, the question is, "How many best SVOD (streaming video on demand) services will the average U.S. home take?'" asked Martin.
"At 60mm paid U.S. subs at 6/30/19, NFLX has the most to lose unless you believe that U.S. homes will add 3, 4 or 5 new SVOD services," she said.
The report followed Roku's second-quarter earnings last week in which the company posted a narrower-than-expected loss and revenue that topped forecasts, sending its shares into record-high territory.
Shares of Roku were up 7.11% at $134.23 in trading on the Nasdaq Stock Market on Monday.