While the streaming landscape is largely dominated by a few key names, Roku (NASDAQ:ROKU) has been making valiant strides in an effort to stay part of the conversation. In fact, it recently achieved some major success of its own, as reported by Comscore. Sadly, this win wasn’t sufficient for shareholders, who pulled back and took Roku’s shares down over 3% with them.
The big win for Roku goes to The Roku Channel, which is Roku’s content arm. Roku is perhaps best known for its hardware but comes with plenty of content to view on said hardware. Based on Comscore’s latest study of the field, The Roku Channel is now the leader in free, ad-supported television (FAST) channels around, beating out Tubi and PlutoTV, among others.
The biggest reason for this surge is the rise in Roku use in general; Roku now holds 49% of the total market by time spent, which means a lot of eyes on The Roku Channel. Interestingly, Roku beat PlutoTV just by a bit but beat Tubi by a factor of better than two to one. With other streamers hiking prices, that makes a FAST platform that much more attractive by extension.
All That and Increasing Transparency, Too
Roku is looking to capitalize on this latest development by improving its potential with advertisers. It’s opening up what it calls the Roku Exchange, offering a better connection between available ads and advertiser interest. Ad buyers can now get a lot more information about Roku content, which should help them tailor their ad buying to better reflect the content being shown. After all, a home and garden show is a great place to advertise a new tiller, but not so much to advertise a new smartphone. It’s hoped that the extra transparency will be an added inducement to join up with Roku advertising.
Is Roku a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ROKU stock based on eight Buys, seven Holds, and three Sells assigned in the past three months, as indicated by the graphic below. After a 22.34% loss in its share price over the past year, the average ROKU price target of $74.88 per share implies 32.53% upside potential.
