Text size
Gabby Jones / Bloomberg
Roku
shares rose Thursday after the company reached an agreement to add
AT&T‘s
HBO Max on its platform. The news has a significantly higher bullish analyst at Benchmark on the stock market.
HBO Max, released in May, was initially not available on Roku (ticker: ROKU) and
Amazon.com ”
Fire TV Platforms (AMZN) Fire. Connected TV or CTV platforms, such as Roku, allow users to access streaming services in their living room. They are also looking for an ad cut or subscriptions to their platform.
Benchmark analyst Daniel Kurnos wrote on Thursday in a note that an agreement was expected to be reached over time, but he still sees a big boost for Roku’s shares. He raised his price target to $ 410, from $ 300. It now has the highest goal listed on FactSet.
“The two recent bids are more significant than the inventory they provide, as part of the bear’s previous thesis focused on Roku’s bargaining leverage loss over time,” Kurnos wrote.
Kurnos notes that a lot of good news seems to have a price on the shares, but he still predicts a significant advance in consensus expectations for the company’s fourth quarter. It points to the strength of advertising driven by cost-per-mile or CPM improvements. CPM is a marketing term used to indicate the price of 1,000 ad impressions on a web page.
It expects the platform’s revenue to reach $ 431.7 million in the fourth quarter, up $ 20 million from its previous forecast. He thinks this may still be conservative.
“We are now also ahead of the consensus for 2021 on all metrics, effectively reflecting the impact of flow and a slightly more optimistic baseline for underlying prices, even when market trends return a bit towards more standardized levels, ”he wrote.
Citi Research analyst Jason Bazinet, who has a target price of $ 375, wrote on Thursday in a note that ultimately the economy of the deal is less important to Roku than it is.
“There will be a long time for Roku to review future agreements with content owners who value Roku’s large CTV platform quite a bit,” Bazinet wrote. “Right now, building a truly global platform (with a wide range of content) is much more important, in our view.”
Shares of Roku rose 1.1% to $ 329.48 on Thursday. He
S&P 500 Index
increased by 0.6%.
Write to Connor Smith to [email protected]