What happened

Roku (ROKU 0.31%) investors got a new jolt of optimism from an analyst on Wednesday. As a result, the company's shares closed more than 4% higher. This helped extend the stock's rally, which entered its third day following the company's release of dispiriting quarterly results.

So what

The analyst in question is Citigroup's Jason Bazinet. Despite lowering his price target on Roku stock from $165 per share to $125, he's still resolutely bullish on the company. A key reason for this is that Bazinet believes the forces battering Roku's recent results were not of its making.

"We believe the recent topline weakness is a function of macro headwinds and does not reflect execution issues at the firm," he wrote in his latest note on the company. "In addition, we note that Roku has $15 of net cash per share (about 20% of the firm's equity value)," he added.

Crucially, Bazinet is maintaining his buy recommendation on the company's stock. In addition to that significant cash pile, he's cheered by the prospects for the macroeconomy to improve, potential strategic interest from peers in (and affiliated with) the streaming video world, and the long-term trend toward consumption of "connected TV."

Now what

We could see a bit more volatility in Roku as investors try to find an appropriate level for the stock following those results. Yes, the company still has much potential, but some of those second-quarter numbers were ugly. (Just look at that nearly 20% decline in player revenue, for example, and the sharp swing into a net loss.) Investors should exercise some caution.