Roku, Inc. (ROKU), a television streaming platform company, announced that Roku Originals recorded strong viewership in the two weeks following its launch on May 20. Shares popped 4.6% to close at $368.43 on June 18.
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The Roku Channel is a home for free and premium TV, streaming hundreds of hit movies, popular shows, 24/7 live news, and more for free. The Channel enjoys an estimated viewership of 70 million in the U.S., as per the company’s first-quarter earnings report. (See Roku stock chart on TipRanks)
To boost its solid viewership, The Roku Channel launched 30 original series featuring major stars including Kevin Hart, Anna Kendrick, Jennifer Lopez, and more via Roku Originals on May 20.
From May 20 to June 3, The Roku Channel witnessed a record number of unique accounts, with the top ten most watched programs being ROKU Originals.
Rob Holmes, the company’s VP of Programming said, “The first two weeks have surpassed our expectations, with millions of people streaming Roku Originals, and provided a further demonstration of The Roku Channel flywheel, with great content driving record engagement that’s appealing to advertisers seeking to reach the streaming audience.”
Additionally, during the first two weeks, one in every three viewers streamed Roku Originals on the Roku Channel with average streaming of over nine episodes per series.
Holmes added, “The momentum around Roku Originals demonstrates not only our ability to acquire great content for The Roku Channel, but to connect that content with the right audience at scale.”
The Channel has plans to release another 45 Roku Originals this year, adding to the Channel’s massive existing library of 40k+ free movies and TV programs and 190+ live linear channels.
Benchmark Co. analyst Daniel Kurnos recently reiterated a Buy rating on the stock with a price target of $550, implying 46% upside potential to current levels.
Noting that the shares have witnessed a rise recently, Kurnos believes that management needs to think out of the box and offered some ideas to drive momentum over the coming 12 to 24 months.
Kurnos says by targeting advertisements more accurately, ROKU could drive enhanced ad yields further, adding that since The Roku Channel currently has only 30% penetration of domestic pay-TV households, the company has huge potential for international markets as well going forward.
ROKU shares have exploded 183.9% over the past year, while the stock still scores a Strong Buy consensus rating based on 15 Buys,2 Holds, and 1 Sell. The average Roku analyst price target of $449.94 implies 18.4% upside potential to current levels.
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