After a selloff, Oppenheimer’s top analyst Jason Helfstein upgraded Roku Inc (NASDAQ:ROKU), from Underperform to Perform today, writing that the stock is no longer appears to be a compelling short. Roku shares have closed today at $34.73 per share, after reaching a peak of $57 back in January.
Helfstein noted, “We now see risk-reward as neutral to favorable as 2018 guidance now reflects the negative impact of ASC 606, while potential positive catalysts include the Roku Channel (previously expected to be a 2019 driver, now pulled forward to 2018), marketing dollars available associated with the acceleration of skinny bundle adoption and potential ACR monetization. While the impending lockup expiration (3/27/2018) may create a short-term technical challenge, we note a significant amount of the shares being unlocked belongs to insiders.”
“We believe the market is quickly reassessing the appropriate multiple for a rapidly growing OTT advertising platform. We take the opportunity in this note to reflect on emerging drivers that weren’t fully considered in our initial outlook, and why we believe the stock is no longer a compelling short,” the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Jason Helfstein has a yearly average return of 19.1% and a 65.5% success rate. Helfstein has a 18.8% average return when recommending ROKU, and is ranked #55 out of 4778 analysts.
Wall Street tends to side with this analyst’s apprehensive attitude toward the stock, as TipRanks analytics exhibit ROKU as a Hold. Out of 6 analysts polled in the last 3 months, 2 are bullish on Roku stock, 2 remain sidelined, while 3 are bearish on the stock. With a return potential of 11.5%, the stock’s consensus target price stands at $38.75.