For many streaming platforms, advertising is life. Sure, some offer subscription plans, but even here, ads are often brought in to lower the costs of those subscriptions. Now, Roku (NASDAQ:ROKU) is up over 4% in Monday afternoon’s trading after a new plan to add advertising to the home screen of its Roku player and similar devices.
This was, on a certain level, the case for some time, with static ads spotted on the home screen. But now, Roku is expanding this to include video advertising, a point that Roku believes will ultimately prove “…very popular with advertisers.” Roku can claim about 120 million viewers on that home screen daily, which is no shortage of people. Indeed, reports suggest that Roku is considering the use of “themed content hubs” to better specialize that advertising and make it a more targeted experience.
Roku Successfully Expands Content Offerings
Meanwhile, Roku’s efforts to expand its content and bring in more viewers to that home screen—and beyond—have met with some success. Reports note that Roku’s acquisition of “The Spiderwick Chronicles,” which Roku picked up from Disney (NYSE:DIS) a while back, has proven a welcome success. The recent debut just concluded, and the show had “…the best first weekend of any on-demand title on the streaming platform in terms of total hours streamed.”
Is Roku a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ROKU stock based on eight Buys, 10 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 3.42% rally in its share price over the past year, the average ROKU price target of $86.69 per share implies 47.96% upside potential.
Is It Wise to Allocate $1,000 Toward ROKU Stock Right Now?
Before you hurry to invest in Roku, think about the following:
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