Why Analysts Are Bullish on Roku Despite a Disappointing Q4 Outlook | Global News Avenue

Year(best of the yearShares of the streaming company surged on Monday after Baird analysts upgraded their ratings on the streaming company’s stock, even as its fourth-quarter forecast disappointed investors.

Analysts upgraded Roku to “outperform” and raised the target price from $70 to $90, which meant Roku shares rose 7% to close at $74.03 on Monday, an increase of about 21%.

“Industry trends are increasingly favorable”

Baird offers upbeat outlook after Roku reports fourth-quarter outlook Losses expected to exceed analysts’ expectations And caused the stock price to plummet. However, Baird noted that “industry trends are increasingly favoring Roku,” including a shift in ad spending toward advertising within streaming content.

Analysts say Roku has “significant existing scale” to capitalize on this trend. They added that the company could also benefit as media becomes increasingly fragmented across different streaming services, which “should amplify the importance of streaming hubs like Roku.” Analysts noted that the company has also made some smart monetization moves, including introducing video ads on the home screen.

“We believe the stock reaction to the recent third-quarter report reflects more of the dynamics of near-term expectations and investor positioning than the underlying quality of the update,” the analysts said. “Specifically, we believe investors may have overlooked “