Roku, a video streaming platform which went online just two months received an unprecedented hike on its shares when it was compared with the giant of the category, Netflix. Since September, its stocks have grown up to 89% as it went all-time high on Monday when Needham Analyst Laura Martin almost doubled her price target for Roku.
The 13% increase, with a peak at $45.10 on Monday was accompanied by an out of the line increase in its stocks since its inception.
This price surge was triggered hours after Needham Analyst Laura Martin gave the stock a price target of $50 which is 10% higher than the Wall Street’s consensus target of 45$ as confirmed by Bloomberg. As per Wall Street Analyst Martin, ‘Like Netflix, we view Roku as a pure-play on over the top (OTT) TV viewing growth, but Roku has no content risk as compared to Netflix. Recent Announcements and press reports that Disney, Google, and Amazon are launching new Over-The-Top (OTT) helps Roku but hurts Netflix.’
Roku and Netflix
As per Martin, Netflix is the closest competitor of Roku but the former can get hit hard if companies mentioned in the comment go ahead and released their OTTs. It can still benefit if these companies give their video license to third parties rather than released their own OTT but this seems highly unlikely as Disney had already issued the notice regarding its pull out of content from Netflix. As per Bloomberg, Roku’s Founder and CEO, Anthony Wood, who owns 27.3% shares of the company, became a billionaire earlier in this month when the shares almost doubled in just three days. While the speculations of it touching the target of $50 as per Martin, it is now just 9% away from topping its record of $48.80 which it had hit on November 14. The current shares have increased by 89.55% since its IPO in the last week of September 2017.
Roku can be described as a series of digital media player set-top boxes manufactured by itself partnering with Over-the-top content in the form of channels. The name has been derived from the Japanese word meaning ‘six’. The name was owned as it was the sixth company founded by Anthony Wood, its founder, and CEO who owns 27.3% shares of the company. The device can be connected to any television set or any other video output platforms for better entertainment.