Streaming and software company Roku Inc (NASDAQ: ROKU) jumped 9.5% after a top analyst gave a positive forecast of its stock.
Evercore ISI analyst Mark Mahaney said that he expects Roku shares to outperform the market this year, and the stock could rise to $400. As a result, Roku investors will receive returns of around 13% based on the shares’ current price of $353. According to Mahaney, the company is likely to profit from the shift in consumer ad spending as people move traditional broadcast TVs to connected TV and streaming platforms. The analyst pointed out the company’s strong position in the ad-supported streaming marketed and the fast-growing customer base as catalysts to boost revenue.
There is a growing number of people canceling traditional cable TV subscriptions and shifting to affordable streaming services. Notably, this is a powerful trend that is working in the company’s favor. Most importantly, its smart TV software and competitively priced streaming devices are increasingly becoming popular. The tailwinds are there for ROKU stock to continue growing, and it is a stock to watch this year.