What happened
Investors were tuning in to Roku (ROKU +2.43%) on Monday, with the stock peaking at 4.7% over Friday's close; ultimately, it ended the day 3.9% higher. An analyst's price target was a major driver of the increase, but the company also benefited from its role in a major shopping holiday.
So what
Loop Capital analyst Alan Gould lifted his price target on Roku stock to $475 per share from the previous $450. Gould was inspired by researcher Magna Global raising its estimate for 2021 worldwide advertising revenue, with anticipated 24% year-over-year growth in digital video ads.
Image source: Getty Images.
Additionally, Gould wrote in a research note, "Roku's platform revenue should also benefit by the aggressive marketing by the streaming companies." The company operates a streaming-video operating system that is platform neutral, allowing users to access nearly every popular streaming service.
The analyst also believes that the company's native Roku Channel, fueled by recent content acquisitions and rollouts, is seeing encouraging growth in viewership.
And a suite of Roku products is being sold at significant discounts during Amazon's (AMZN +2.05%) annual Prime Day shopping frenzy that kicked off on Monday. These often find their way into articles concerning the best Prime Day deals; this lifts Roku's visibility and should increase take-up of its products.
Now what
Roku is a top name in the streaming universe, and continues to bolster its position as a go-to neutral operating system. These two developments, particularly the Amazon Prime Day headlines, should support that momentum.
