Roku stock rockets toward new record after Needham boosts price target

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Shares of Roku Inc. are up about 10% in afternoon trading Thursday after Needham analyst Laura Martin upped her price target on the stock to $400 from $315. The stock is on track for a new record-high close, which would be its first since Dec. 23. Martin’s increased price target comes after Roku disclosed better-than-expected preliminary active-account and streaming-hours metrics for the fourth quarter. “What’s clear to us from 2020 is that ROKU has won the streaming wars in the US,” Martin wrote in a note to clients. “Its [connected TV] focus, platform competitive advantages, moats, and execution excellence all suggest to us that ROKU will continue to take market share in 2021.” Martin expects greater advertising revenue for Roku in 2021 as big ad categories like travel, retail and entertainment could step up their spending amid an economic recovery. She also expects the company will benefit from an advertising perspective now that people are viewing streaming content for longer periods of time. Roku shares have added 77% over the past three months as the S&P 500 has increased about 11%.
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