:max_bytes(150000):strip_icc()/GettyImages-1801103924-6662e48952fd47b88c6b7d0447dc5082.jpg "Roku stock recovers after Guggenheim analyst upgrade due to monetization efforts")
Roku stock recovers after Guggenheim analyst upgrade due to monetization efforts
Key findings
- Roku shares rallied on Friday after Guggenheim analyst Michael Morris reportedly upgraded Roku’s stock rating to “buy” from “neutral.”
- Guggenheim’s $75 price target for the stock represents a premium of about 8% over Friday’s closing price.
- Morris said Roku’s efforts to monetize its video advertising inventory are starting to pay off.
Roku (ROKU) shares jumped on Friday after analysts at Guggenheim upgraded the stock to a “buy” rating from “neutral.”
Shares of the streaming technology company rose nearly 12% following the report, with Guggenheim’s $75 price target representing a nearly 8% premium to Friday’s closing price of $69.14.
Guggenheim: Roku has improved its monetization efforts
According to Guggenheim analyst Michael Morris, Roku has improved its monetization efforts, which changed his assessment of the company.
“We had concerns about the strategy of driving incremental monetization,” Morris said in an interview with ^ “CNBC News”. “About two years ago, they started to revitalize the leadership team… Now, I think we’re really starting to see the fruits of that labor, particularly expanding their ability to monetize their video advertising inventory.”
Morris also pointed to Roku’s potential to better monetize its home screen, as the company ended the second quarter with nearly 84 million streaming households.
Despite Friday’s rally, Roku stock has not yet fully recovered from the losses it suffered after releasing fourth-quarter results in February, when the company reported a decline in average user spending and warned of “near-term challenges in the macro environment.” The stock has lost nearly a quarter of its value since the start of the year.
