Roku Shares Explode After Big Prediction from Analyst

According to an analyst, Roku has a lot to look forward to.

Shares of the streaming device maker were exploding on Wednesday after an analyst predicted that Roku would triple its user base by the year 2022.

Macquarie analyst Tim Nollen has predicted that the company will experience significant overseas growth and said the company could benefit from “powerful growth” in connected TV devices and advertising. According to Nollen, Roku could experience Netflix-like growth overseas.

While shares of Roku saw a gain of 9% on the prediction, shares of Netflix slid 1.1%.

Nollen projects Roku could reach 72 million users in 2022, up from the 30.5 million active users it reported in the second quarter.

“We know little about the international roll-out plans, or costs beyond this year, which we assume will rise as marketing demands emerge,” said the analyst. “Roku’s growth trajectory internationally could well echo that of Netflix’s, which has also tripled over the past 3 years.”

The firm upgraded Roku shares to outperform from neutral and increased the price target to $130 from $110.
Shares of Roku have more than quadrupled this year and have seen a gain of almost 14% in the last three months.

Roku’s is expected to release its next financial report on Nov. 6, according to Bloomberg data. Analysts are looking for an adjusted loss of 26 cents a share on revenue of $256.4 million.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.