Roku gets Market Perform rating at Raymond James

Raymond James resumed coverage of Roku (NASDAQ:ROKU) with a Market Perform rating, seeing mixed prospects for the streaming platform company.

The analysts see several fundamental factors working in Roku’s favor — strong positioning in the streaming television space, with an active audience of over 70M households while benefiting from total streaming growth over the success of any specific service or revenue model; exposure to growth in connected TV, or CTV, advertising, which is taking increasing share of the nearly $90B U.S. TV ad market.

Another factor working for the company is, multiple avenues for ad business growth including inventory expansion and new formats.

However, the analysts see near-term expectations as reasonable given the choppiness in the ad market (including certain parts of the CTV market to which Roku is levered) and EBITDA losses until the company’s cost structure rationalization kicks in next year.

The analysts added that they have assigned a Moderately Aggressive Risk/Wealth Accumulation suitability rating to Roku due to its relatively short operating history and volatility in ad market trends.

Roku has a Hold rating at Seeking Alpha’s Quant Rating system, which consistently beats the market. The Seeking Alpha authors’ average rating is also Hold and so is the average Wall Street analysts’ rating.