.August 23, 2024 12:47:00 PM

Roku (NASDAQ:ROKU) is expected to see accelerated revenue growth, with analysts at Guggenheim upgrading the stock to Buy and setting a 12-month price target of $75. Shares are up over 12% intra-day. The company’s strategic initiatives, such as expanding video inventory advertising sales and improving home screen monetization, are key factors in the projected revenue boost for 2025, with financial estimates above current consensus for 2024 and 2025.

Guggenheim highlights Roku’s leadership team, led by Roku Media President Charlie Collier and CFO Dan Jedda, as instrumental in improving monetization and ensuring disciplined performance over the next few months. This shift in execution is expected to increase investor confidence and position Roku for sustained long-term growth, addressing past concerns about slower execution in the connected TV market.

Despite competition in the advertising and connected TV sectors, Guggenheim is optimistic about Roku’s ability to achieve a 15% normalized OIBDA margin by balancing revenue growth with cost management. The firm views Roku’s strategic efforts as crucial drivers of future growth, with the potential to provide significant upside for investors.