Roku soars 13% after a Wall Street analyst says it could compete with Netflix

Reuters / Brendan McDermid

• Roku, a video streaming device maker, has seen its stock climb 89% since going public in September.
• The stock neared its all-time high on Monday after Needham analyst Laura Martin almost doubled her price target.
• She says the stock could reach $50.

Shares of Roku climbed over 13% Monday, peaking at $45.10, nearing an all-time high for the streaming device maker that went public just two months ago.

The price pop came just hours after Needham analyst Laura Martin gave the stock a price target of $50 - 10% above Wall Street's consensus target of $45, according to Bloomberg data.

"Like Netflix, we view Roku as a pure-play on over-the-top (OTT) TV-viewing growth, but Roku has no content risk," Martin said. "Recent announcements and press reports that Disney, Google, Amazon, etc. are launching new Over-The-Top services helps ROKU but hurts NFLX."

Netflix, which Martin says is Roku's closest competitor, could be the victim if production companies like Disney opt to build their own streaming services rather than license content to third parties. Disney announced earlier this year it would pull its content from Netflix for its own service, to be priced much lower than Netflix.

Roku's founder and CEO, Anthony Wood, became a billionaire earlier this month after shares doubled in just three days after the company crushed its first earnings report as a public company. He owns 27.3% of the company.

The stock is now just 9% away from topping its record of of $48.80, which it hit on November 14.

Shares of Roku are up 89.55% since its IPO on September 27.

Markets Insider