Shares of Roku Inc. (ROKU) were up 2.2% in premarket trading Tuesday after Susquehanna analyst Shyam Patil began coverage of the stock with a positive rating and $80 target price. Roku's operating system "is purpose built for low-cost TV hardware, while its competitors have largely repurposed operating systems from phones and tablets, and this matters as TV profit margins are razor thin and the hardware in TVs is not nearly as sophisticated as mobile devices," he wrote. "Second, Roku is unbiased with the content it allows on its platform, and this is important as the apps from the top 4 players all have at least 30% reach of total over-the-top households." He sees the connected-TV ad market inflecting and called Roku one of the top ways to play this trend. "In all, we see Roku as a 30%+ top-line grower with upside potential and a clear path to sustainable profitability," Patil wrote. Roku's stock has gained 90% so far this year, as the S&P 500 has risen 16%.
-Emily Bary; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
April 23, 2019 08:08 ET (12:08 GMT)
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