Roku Stock Rises To 10-Month High As Analyst Sets Off Buyout Chatter: Retail Remains Upbeat

Roku, Inc. ($ROKU) shares rallied early Wednesday after an analyst hinted that the streaming equipment maker could be a buyout target. Retail remained upbeat on the stock. 

In a note released Wednesday, Needham analyst Laura Martin raised the possibility of Roku being acquired for a hefty premium in 2025 as the Republican-controlled regulatory agencies take charge, TheFly reported.

The analyst also lined up a list of potential buyers, including streaming companies such as Netflix, Inc. ($NFLX), connected TV ad buyers like Trade Desk, Inc. ($TTD), retailers like Target, Inc. ($TGT) and large-language models hungry for news data points such as Amazon, Inc. ($AMZN), Microsoft Corp. ($MSFT) and Alphabet, Inc. ($GOOG) ($GOOGL).

The analyst said Roku’s installed base, unique data sets, pricing power, shelf space, buy-versus-build advantages, and credentials as the only scaled, connected TV program that can be purchased are the pulling points for a potential buy.

Martin maintained a “Buy” rating for the stock and a $100 price target. 

On Monday, analysts at Guggenheim discussed a hypothetical scenario of Trade Desk acquiring Roku. Trade Desk recently announced that it has developed a streaming TV operating system named Ventura. 

The analysts rationalized the conjecture by saying another operating system (OS) provider presents an incremental competitive threat to Roku, adding that Trade Desk faces an uphill task in increasing Ventura’s market penetration to impact the industry.

ROKU sentiment and message volume December 4, 2024, as of 10:58 am ET | Source: Stocktwits

On Stocktwits, retail sentiment toward Roku stock remained ‘extremely bullish’ (79/100), with a ‘high’ message volume. 

At last check, Roku shares were up 11:48% at $84.38, marking the highest level since Feb. 15. The stock has fallen over 17% this year. 

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