ROKU is on track for its best day since November after a rare upgrade
Roku Inc (NASDAQ:ROKU) is up 9.1% to trade at $67.44 this morning, on track for its best single-session gain since November. This comes after Guggenheim upgraded the streaming stock to "buy" from "neutral" and set its price objective at $75. The analyst in coverage highlighted several revenue drivers, including home screen ads and original content.
The upgrade is notable because the brokerage bunch leans bearish, with 15 of the 24 analysts in coverage still rating Roku stock a "hold" or worse. ROKU has staged a bounce off its Aug. 5, 52-week low of $48.33, and is trading at its highest level since a Feb. 21 post-earnings bear gap. The equity is on track for its third-straight weekly win, as it chips away at its 28.7% year-to-date deficit.
A short squeeze could power more gains. Short interest fell 14.5% during the last two reporting periods, but the 10.3 million shares sold short make up 8.1% of the security's available float, indicating there's plenty of pessimism left to unwind.
Now looks like a great opportunity to bet on the stock's next move with options, per its Schaeffer's Volatility Index (SVI) of 45% that ranks in the 7th percentile of its 12-month range. In other words, option players are currently pricing in low volatility expectations.