By Dhirendra Tripathi
Investing.com – Roku (NASDAQ:ROKU) shares rose 4% Tuesday after Truist analyst Matthew Thornton upgraded the stock to buy, influenced by attractive valuations and an anticipated boost from its platform business.
Thornton previously had a hold on the stock. His target price is $367, which implies a gain of 18% from the current price.
Roku last week launched an ad brand studio ahead of TV upfronts. On March 19, it announced the acquisition of "This Old House," a popular TV home improvement program.
Thornton noted that the firm's gross margin estimates for the platform business are 4% higher than consensus for the first quarter as well as for the full year and 7% ahead for 2022. Truist sees similar upside levels for revenue and earnings before interest, taxes, depreciation and amortization.
Catalysts for the upside could include TCL Roku TVs rolling out in the U.K. and Brazil, and Roku's "progress with linear addressable" TV, which could "add low-hundreds-of-millions gross profit."
Merrill Lynch analyst Ruplu Bhattacharya reiterated a buy on Roku on March 22, setting a price target of $500. This is 60% higher than the stock's current price.