Shares of Roku (NASDAQ:ROKU) rose today after J.P. Morgan analyst Cory Carpenter initiated coverage of the company.
The tech stock spiked by as much as 7.4% today and was up by 5.6% as of 1:50 p.m. EST.
Carpenter started coverage of the video streaming platform company with a price target of $475 and noted that his positive sentiment toward Roku comes as the company is tapping into the shift from traditional pay-TV to video streaming.
The analyst mentioned that Roku already has 51 million active accounts and is set to benefit from advertisers migrating from traditional pay-TV sources to streaming platform services. Carpenter pointed out that only 8% to 9% of television advertising budgets are directed toward streaming right now.
Investors appeared to agree with Carpenter's analysis and pushed the company's share price up today. With today's increase, Roku's stock is up 230% over the past 12 months.
Investors have been bullish on Roku as the company has continued to increase its active customers and as lockdowns and social distancing have forced people to spend more time at home. It's likely that advertisers will take an increased interest in the video streaming platform company in the coming years as more companies rush to launch their own video streaming services.