Shares of streaming device maker Roku (NASDAQ:ROKU) have been red-hot for the past few months. Ever since Roku stock dropped to $30 in early April 2018 after a weak first quarter guide, the stock has proceeded to rebound all the way back to $50. That is a powerful, near 70% rally for Roku in just three months.

The latest catalyst? A bullish upgrade from KeyBanc. Citing positive consumer survey data and healthy search interest trends, KeyBanc upped their price target on Roku to $54, from $44, while maintaining an “Overweight” rating.

In a note to clients, KeyBanc called ROKU stock a “unique platform play on the growth in long-form, streaming video, with a strong competitive position and improving fundamentals.”

Can Roku stock head to $54? And, perhaps more importantly, how much higher can this red-hot stock go?

At $50, I think Roku is starting to look a little maxed out. Based on various assumptions regarding the company’s long-term growth prospects, I think it is worth anywhere between $30 and $60 today. But, I think prices closer towards $30 make more sense given long-term competitive headwinds.

That being said, the near-term fundamentals are great, and that should support higher prices in the near-term. But, for longer-term investors, I think you can afford to wait for a better entry.

Here’s a deeper look.

The Fundamentals on Roku Are Great

For all intents and purposes, it does look like Roku is simply dominating the streaming device market right now.

Roku has seen a healthy uptick in search interest in 2018, with Google Trends pointing to an 18% year-over-year increase in search interest so far this year. That does likely signal growing adoption of Roku streaming devices.

Moreover, in comparison to the competition, Roku has separated itself in terms of search interest, implying that Roku is winning market share while peers are losing market share. Specifically, Roku has separated itself from the once equally popular Chromecast, made by Google (NASDAQ:GOOG).

This search interest data lines up with market research data from Parks Associates. They peg Roku as not only having market-leading 37% market share in this market, but also note that Chromecast is losing market share while, despite rising competition, Roku has maintained its dominant market share.

Overall, the present landscape for Roku is quite positive.

Netflix (NASDAQ:NFLX) has shown us that over-the-top entertainment consumption is a global, secular movement. Now, every media and technology company is pivoting into this space and creating their own over-the-top entertainment service.

Consumers need a way to watch all these services, so the whole streaming device market is propped up by some very strong secular tailwinds.

Right now, Roku is not only winning that secular growth market, but also dominating it. As a result, quarterly numbers will likely be good, and ROKU stock will likely head higher in the near-term.

The Fundamentals for Roku Will Only Get Weaker

But I question how long this golden era will last for Roku stock.

Right now, Amazon (NASDAQ:AMZN) is on fire in the OTT device market. Their huge market share gains are coming at the expense of Google. But, over time, Google could get its act together here, and leverage its growing portfolio of smart home tech to drive Chromecast adoption rates up.

After all, the smart home market and OTT device market aren’t isolated. They exist side-by-side, and over time, synergies will develop between these two markets so that smart home devices can control your OTT device players.

In that world, Roku loses. Why? Simply because they don’t have a smart speaker. Nor will they ever have a smart speaker that has similar capabilities as Amazon or Google’s smart speakers. These are the top dogs in the smart speaker world and will remain so because they have a ton of data, the sum of which is used to power each company’s AI initiatives.

Roku doesn’t have that all data, and as such, they don’t have the capability to make an Amazon-level or Google-level smart speaker.

Without a strong smart speaker, Roku could start losing significant market share in the long-term once the smart home and OTT device markets start overlapping. In a scenario where Roku’s market share drops to 25%, I think Roku stock is only worth about $30 today.

Bottom Line on Roku Stock

Near-term, the fundamentals on Roku are great. This is a company which is dominating a secular growth market. As such, the numbers will be good, and that should be enough to support higher prices in the near-term for Roku.

But, in the long-term, the fundamentals aren’t so great. The smart home and OTT device markets are rapidly converging, and once they start overlapping, Roku stands to lose a ton of market share because it doesn’t have a formidable presence on the smart home side. In that scenario, Roku stock may be worth only $30 today.

As of this writing, Luke Lango was long GOOG and AMZN.