Roku Inc (NASDAQ:ROKU) should breeze past fourth-quarter guidance after hitting 90 million streaming households sooner than expected, Wedbush analysts believe.
Streaming device maker Roku on Tuesday said it had hit the milestone over the first week of January, after closing 2024 with 89.8 million streaming households.
Wedbush in response noted the figure had beaten its estimate and reiterated an ‘outperform’ rating and US$100 share price target for Roku.
“We think Roku will handily beat its [fourth quarter] guidance and issue 2025 pre-tax earnings guidance ahead of our conservative US$275 million estimate,” analysts said.
Roku had guided for a net loss of $65 million in the fourth quarter and adjusted earnings of US$30 million on revenue of US$1.14 billion.
Wedbush added Roku was now on course to surpass US$200 million in adjusted pre-tax earnings for 2024 and reach profitability within the next two years.
“We expect Roku to benefit from rising ad demand, driven by new demand-side platform partnerships, new inventory, improved targeting and sports-adjacent ads, partially offset by lower ad pricing throughout connected TV as inventory grows among competitors.”
Roku is expected to provide fourth-quarter figures in mid-February, which Wedbush anticipated would see revenue of $1.18 billion and adjusted earnings of $40 million.
Shares were up 4.5% at $81.67 in early trading on Wednesday.
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