Roku Stock Stays Hot After Analyst Upgrade

Roku options are attractively priced at the moment

Managing Editor
Jul 3, 2018 at 9:56 AM
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Roku Inc (NASDAQ:ROKU) stock is up 4.1% to trade at $45.07, after Oppenheimer upgraded the streaming name to "outperform" from "perform," while setting a $50 price target. The analyst in coverage believes the company's new Roku Channel feature will boost video advertising revenue.

Oppenheimer's price target sits in territory Roku stock has not traded in since before a mid-February bear gap. However, since bottoming at a 2018 low of $29 in early April, the security has added 55%, and is now on track for its fourth straight win.

There's room for more analysts to upwardly revise their outlooks on the streaming giant, should this positive momentum continue. At last night's close, six of the 10 analysts in coverage rated the stock a tepid "hold." What's more, ROKU's average 12-month price target of $43.40 is a discount to current trading levels. 

In the options pits, buyers have handily favored calls in the past 10 days. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculative players have bought to open 19,778 calls in the last 10 sessions, compared to 9,438 puts.

It's a great time for premium buyers to target short-term options on ROKU, too. This is according to its Schaeffer's Volatility Index (SVI) of 56%, which ranks in the low end of its post-IPO range -- indicating premium on short-term contracts is relatively cheap at the moment, from a historical volatility standpoint.

 
 

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