Analyst: Roku Sales Could Triple By 2022

Macquerie sees the cord-cutting trend becoming international

Managing Editor
Oct 9, 2019 at 9:51 AM
facebook twitter linkedin


Almost three weeks ago, Pivotal Research called Roku Inc (NASDAQ:ROKU) "overvalued" and said it's time to sell the streaming stock. Today, Macquarie is singing a different tune, raising its rating to "outperform" and hiking its price target to $130 from $110. The analyst in coverage sees an international shift in cord-cutting, and combined with smart TVs, envisions Roku's sales tripling by 2022. 

In response, Roku stock is up 3.2% to trade at $111.46 this morning. Although the shares have nearly quadrupled in 2019, they suffered a dramatic pullback in September, losing 32.77%. This damage was contained by the round $100 level, however, which coincides with ROKU's pre-bull gap levels from early August. 

Despite the stock's overall success this year, many analysts remain skeptical. Of the 15 brokerages covering ROKU, seven rate it a "hold" or "strong sell." That sentiment is echoed among short sellers, who control a healthy 12.1% of the equity's total available float. 

For those that want to join in on a possible Roku rally, now looks to be an attractive time to jump on the security with options. The equity's Schaeffer's Volatility Index (SVI) of 72% registers in the 25th percentile of its annual range, meaning near-term options premiums are pricing in unusually low volatility expectations.

What's more, the equity's Schaeffer's Volatility Scorecard (SVS) of 100 (out of 100) shows Roku's strong tendency to make bigger-than-expected moves during the past year, relative to what the options market was pricing in.

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners