Roku (ROKU) is seeing faster monetization, better profitability, and tax benefits that could support share repurchases, Wedbush Securities said in a note Thursday.
The company is expected to keep gaining market share as advertising budgets move from traditional to connected TV, supported by integration with Amazon.com (AMZN), the investment firm said, adding it anticipates similar collaborations with other players such as Alphabet (GOOG, GOOGL) Google's DV360 in 2026 or 2027.
Roku's large US TV footprint makes it an attractive advertising and e-commerce partner, while additional ad slots and the recent launch of the Ads Manager tool broaden access for small and performance-focused advertisers, according to the note.
The company is also pushing into interactive and commerce-led formats such as QR-code and shoppable ads tied to retailers, which should strengthen attribution and support quicker revenue growth into 2026 and 2027, Wedbush said.
Roku's net operating loss carryforwards should keep taxes low, converting pre-tax income into distributable cash and giving the company scope to step up stock repurchases, the investment firm said.
Wedbush added Roku to its Best Ideas List and raised its price target to $130 from $115, while maintaining an outperform rating.
Shares of the company were up more than 3% in recent trading Thursday.
Price: 108.74, Change: +3.38, Percent Change: +3.21
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