Roku Stock Up, Analyst Upgrades Free, Ad-Supported Model

Roku stock saw another big rise, due to a strong analyst upgrade of its free, advertising-based TV business.

Laura Martin, media analyst/managing director at Needham & Company, says the big streaming OTT platform works in sharp contrast to Netflix, which has more competition from major players.

“The vast majority of streaming services have chosen to either charge a subscription or give consumers free programming, supported by advertising. Roku’s focus is on free content, supported by ad dollars. Netflix is competing for subscription dollars.”

Netflix competitors include Walt Disney, WarnerMedia and others.

NBCUniversal has also been mulling a fee-based streaming platform, as well as a version that is free and ad-supported.

In mid-day trading, Roku’s stock was up 7.5% to $134.69. Martin raised her price target on the stock to $150 from $120.

Yearly advertising estimates for Roku from eMarketer point to $433 million in 2019 and $633 million in 2020. Roku, which now has just under 30 million subscribers, has seen its stock rise 338% this year.

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