Shares of Roku (ROKU 2.66%) rose on Wednesday, following bullish analyst commentary. As of 11:35 a.m. EST, the streaming-media platform's stock price was up more than 5%.
Citi analyst Jason Bazinet reiterated his buy rating on Roku's shares and boosted his price forecast from $220 to $375. Bazinet's new target price represents potential gains for investors of roughly 17% from the stock's current price near $320.
Bazinet highlighted several possible catalysts that could help drive Roku's stock price higher. They include new distribution deals with Discovery Communications and AT&T's HBO Max, as well as Roku's international expansion initiatives.
Additionally, Bazinet is now placing a higher value on Roku's active user accounts, due in part to his expectation that the company will generate rising profit margins over time.
Roku and its shareholders are profiting handsomely from the overall growth of the streaming market. Roku's revenue soared 73% year over year to $452 million in the third quarter, driven by a 43% rise in active accounts and a 54% increase in streaming hours on its platform.
Better still, Roku is becoming more profitable as it expands its user and revenue bases. The streaming leader delivered an operating profit of $12 million, compared to a loss of $26.5 million in the prior-year quarter.
Roku's stock price, in turn, is now up 137% so far in 2020.