What happened 

Shares of Roku (NASDAQ:ROKU) climbed on Thursday, following positive analyst remarks. As of 2:36 p.m. EDT, the streaming media company's stock was up 4%, after rising as much as 7.4% earlier in the day. 

So what

Needham analyst Laura Martin reiterated her buy rating on Roku's stock and boosted her price forecast from $190 to $255. Martin's new estimate represents potential gains for shareholders of roughly 16% from the stock's current price near $220.

A digital bull is climbing an upwardly sloping stock chart.

Analysts at Wall Street investment bank Needham are bullish on Roku's shares. Image source: Getty Images.

Martin sees Roku benefiting as the cable giants continue to lose market share to streaming media services delivered directly to viewers via the internet. Roku's rapidly expanding base of streaming media players and rising TV viewership during the coronavirus pandemic should also fuel its expansion, according to Martin.

Now what 

Roku is well positioned to profit from the overall growth of the streaming market, via a combination of hardware, software, and advertising sales. New subscription and advertising-based video-on-demand services should help drive account and viewership growth, which, in turn, should lead to heightened demand for Roku's marketing services.

Based in part on these factors, Roku's stock has delivered strong returns to investors in 2020, with shares up 65% so far this year. And with powerful trends fueling its growth, Roku's shares could easily hit Martin's $255 price target in the months ahead.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.