Oppenheimer names – Roku is getting a fresh spotlight from Oppenheimer, which named the streaming hardware and ad platform a top stock pick with a $145 target price, citing rising ad and subscription momentum, improved cost discipline, and a stronger monetization push.
When Roku’s stock looks like it’s finally found solid footing, the numbers help explain why. Oppenheimer Asset Management thinks the current moment is the right time to back small- and mid-cap companies—and its pick is Roku.
The case starts with what used to limit Roku. The company manufactured streaming boxes that helped consumers watch Netflix and other services. but its hardware business was “barely profitable.” That forced Roku to pour money into programming and advertising businesses—something Oppenheimer says is now paying off.
Roku, once a roller coaster, has had a striking turnaround in investor confidence. Oppenheimer expects ad and subscription revenues to keep climbing. Other analysts, too, point to a shift: Roku has become more disciplined and tightened costs.
The stock itself has mirrored that change. In 2021, Roku’s shares soared as high as $473. A year ago, they were in the $73 range, and they’ve risen 77% to a current level. Roku’s market cap sits at $19.4 billion.
Oppenheimer’s view is explicit. The firm rates the stock “outperform” and set a target price of $145 per share, up from $120. Roku closed Thursday at 131.09, near its 52-week high of $132.80.
Oppenheimer analysts Jason Helfstein. Jed Kelly and Chad Larkin tied their optimism to monetization investments that are beginning to bear fruit. Those include third-party integrations with programmatic buying platforms and an expanded subscription offering. They also pointed to Roku’s recently improving ad business as a standalone measure.
Roku’s first-quarter results helped set the tone. The company’s earnings beat Wall Street estimates. Platform revenue came in 6% higher than forecasts, and EBITDA outperformed by 13%, as margins rose by 99 basis points.
A new signal followed soon after. Roku started breaking out ad revenues as a separate metric, a move described as evidence that the business is becoming healthier on its own. In the first quarter, ad revenues rose 27%.
Guidance also pushed the story forward. Roku’s full-year revenue growth guidance is 21%, up from prior guidance of 18% and above Wall Street forecasts.
On an earnings call, founder and CEO Anthony Wood sounded upbeat about the momentum. “We delivered an outstanding quarter and are executing against our monetization initiatives,” he said. “We’re building a highly performing connected TV ad platform. And then subscription revenue grew 30%, driven by premium subscription sign-ups.”.
Roku CFO Dan Jedda added detail about where margins may be headed. “Think of the home screen monetization. Adding video in our home screen has been very positive for us,” he said. Jedda also described being efficient in how campaigns are delivered “from a gross margin standpoint. ” saying Roku has “a lot of ways that we focus on overall gross margin and maximize the gross margin of the business in addition to increasing the revenue.”.
Even with the optimism, the bullish case isn’t framed as blind faith. Oppenheimer said investors should be “more confident in long-term gross margin leverage. ” but it also flagged a lingering pressure point: near-term headwinds tied to exposure to media and entertainment advertising and streaming subscription services.
Oppenheimer’s pitch still rests on Roku’s scale and product mix. The analysts said Roku can “leverage its advantages in pricing and merchandising to remain the market leader in consumer-facing connected television solutions. ” while also warning that the entertainment category is becoming a smaller contributor to Roku’s advertising business. Their point was specific: advertising is still only 55% of platform revenue.
That kind of measured confidence is echoed by at least one other analyst, too. Michael Nathanson of MoffettNathanson Research praised Roku’s shift from “a badly run. financially undisciplined. strategically adrift company into a finely tuned earnings juggernaut. ” saying it “needs to be applauded and should serve as a model for other public companies facing similar dire straits.”.
Nathanson is “neutral” on Roku stock, but he raised both revenue and earnings estimates and boosted his target price for Roku shares to $130 from $100. After the most recent earnings report, he said he was “incrementally more positive on the momentum in Roku’s business over the near to medium term.”
The story right now is less about whether Roku survived the streaming boom—and more about whether it can keep monetizing the attention it already captured. With ad revenues rising 27% in the first quarter. subscription revenue growing 30% as described on the earnings call. and full-year growth guidance pushed to 21%. the bet is that Roku’s turnaround isn’t just visible in a chart. It’s visible in the way its business is measuring itself.
Roku Oppenheimer Asset Management streaming connected TV advertising revenue subscription revenue Anthony Wood Dan Jedda Jason Helfstein Jed Kelly Chad Larkin stock target price