Streaming platform Roku got a rating upgrade from KeyBanc analyst Justin Patterson.
Patterson raised his rating to overweight from sector weight with a $518 price target. According to Patterson and team, Roku is becoming a key enabler of the direct-to-consumer (D2C) video ecosystem, as is apparent in its large active accounts base (~51M as of 4Q20). “We believe the company's AdTech investments are expanding Roku's [total addressable market], providing ample runway to sustain 40%+ revenue growth largely in N. America," Patterson said.
On Monday, Roku announced that it has agreed to purchase Nielsen’s Advanced Video Advertising business, which includes Nielsen’s video automatic content recognition and dynamic ad insertion features. The acquisition of Nielsen's advertising assets should help Roku to expand its total addressable market, according to Patterson.