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Roku Stock's Biggest Bull Prefers It Over Netflix. Here's Why. -- Barrons.com
9:40 am ET August 12, 2019 (Dow Jones) Print
By David Marino-Nachison

Buy Roku, not Netflix, says the analyst who is now the biggest Roku bull on Wall Street.

Roku stock (ticker: ROKU), up 309% in 2019 through Friday's close, was up 4.6% to $131.11 shortly after Monday's open. Needham analyst Laura Martin reiterated a Buy rating on the shares on Monday, boosting her price target by $30 to $150, above FactSet's roughly $115 average and the highest tracked by FactSet.

Both Roku and Netflix (NFLX) stocks, Martin said, trade near 8 times her estimates of 2020 revenue. "Given similar valuations, we prefer Roku," she wrote.

The companies both look to benefit from increasing consumer migration to streaming services, but Roku, as a platform that aggregates content and resells other services, means it doesn't need to compete on content or on monthly fees.

Read: Here's Why Netflix's Problems Have Only Just Begun

Roku "is an arms dealer," Martin wrote. "It is indifferent about which over-the-top services or business models win. Roku negotiates a 20-30% revenue share from every over-the-top service that wants access to its 30 million homes. At 3.5 hours a day per household of viewing in the second quarter of 2019, it would be impossible...to launch a new over-the-top service without access to Roku's 36% of connected TV homes."

Roku's shares rose last week after the company reported second-quarter financial results and an updated outlook that encouraged investors. Several bullish analysts quickly boosted their share price targets after the results were released, and one bear said his valuation was "under review."

Shares of Netflix were up 15% in 2019 through Friday's close. They were down 1% at $305.93 shortly after Monday's open. The S&P 500 was down 0.6%. The company's latest quarterly numbers, which included a domestic subscriber loss, worried some investors.

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gougler08 said:

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IrishTxAggie said:

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ROKU got a rocket up it's ass premarket. Up almost 3% on Needham's upgrade to $150.

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My worst no trade so far...was trying to let it get down to $35 a while back (got to $36) and never executed my buys

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Aggie_2463 said:

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oldarmy1 said:

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Look at the HEAR insider buys above the current price.

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So you're saying buy

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oldarmy1 said:

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Aggie_2463 said:

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oldarmy1 said:

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Look at the HEAR insider buys above the current price.

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So you're saying buy

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Yes ---plus they have a buyback program going on.

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IrishTxAggie said:

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Prognightmare said:

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You, me, Irish and Ragoo have been on this board awhile now, so I'm just ribbing a brother.

ETA: FWIW I think it will pullback to $110-113 when all the excitement dies down

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Hopefully this week...

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Aggie_2463 said:

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HEAR up to $9.14

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oldarmy1 said:

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2nd support bounce on below 2894 flash doe to 2892.63.

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Prognightmare said:

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I bought SFIX at 22.20

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oldarmy1 said:

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COOP breaking out

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IrishTxAggie said:

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Looks like ROKU finally found it's resistance at $135.5

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oldarmy1 said:

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Prognightmare said:

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I bought SFIX at 22.20

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I went Sept 20 $24 calls.

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WestTexAg12 said:

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IrishTxAggie said:

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Looks like ROKU finally found it's resistance at $135.5

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$136.07 now. Shooting up again.

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WestTexAg12 said:

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oldarmy1 said:

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Prognightmare said:

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I bought SFIX at 22.20

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I went Sept 20 $24 calls.

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What's your price target for those?

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oldarmy1 said:

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JD buyers using the down day to sneak it higher against macro market sellers..

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