Roku (NASDAQ:ROKU) news for Tuesday includes new coverage of the stock pushing it higher.
Wells Fargo analyst Steven Cahall is behind the positive Roku news. The analyst initiated coverage of the stock today with a bullish stance. That includes an overweight rating and a price target of $215 per share.
That price target is what’s most interesting about this Roku news. It’s currently sitting 34.5% higher than the stock’s closing price of $159.90 on Friday. That’s also the highest price target among Wall Street analysts covering ROKU stock.
So what exactly has the Wells Fargo analyst taking such a strong stance on Roku? It has to do with average revenue per user. Cahall believes that the size and scale of the company give it the potential to become an advertising giant in the future.
Here’s what Wells Fargo analyst Steven Cahall says about Roku in a letter obtained by Barron’s.
“With Roku being able to negotiate for more premium impressions we believe there are now precedent conditions for CTV to become more common in brand building ad campaigns—a space traditionally occupied by content networks.”
The fact that Roku could take off on strong advertising opportunities is linked to its growth. The streaming company has seen an increase in subscribers over the last few months. That’s due in part to more people signing up for streaming services due to the novel coronavirus forcing them to stay home.
ROKU stock was up 3.4% as of Tuesday afternoon.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.
