What happened
Roku (ROKU 5.14%) climbed on Tuesday after a respected analyst issued an optimistic forecast for its shares. As of 1:30 p.m. EDT, the streaming media platform's stock price was up more than 7%.
So what
Evercore ISI analyst Mark Mahaney expects Roku's stock to outperform the market in the year ahead, during which he sees its share price rising to $400. If Mahaney's correct, Roku's investors could enjoy returns of roughly 13%, based on the stock's current price near $353.
More gains lie ahead for Roku's shareholders, according to Evercore's analysts. Image source: Getty Images.
Mahaney said Roku is poised to profit as marketers shift their ad spending from traditional broadcast television to streaming and connected TV platforms. Mahaney highlighted Roku's strong competitive position within the ad-supported video streaming market, as well as its rapidly expanding customer base.
Now what
More people are canceling their traditional cable TV packages and replacing them with less expensive streaming services than ever before. This powerful trend is working in Roku's favor. Its low-priced streaming devices and smart TV operating software is proving popular among consumers. And as its viewer base grows, advertisers are flocking to Roku's platform.
With cord-cutting accelerating, Roku appears set to deliver handsome returns to its investors in the coming years.
