Analysts peg Roku as primed for acquisition by The Trade Desk, Amazon, or others

While a number of streaming companies have had it rough on Wall Street in recent years, Roku has been particularly stuck in the investor dog house since peaking in July 2021 at nearly $473 a share.

But Roku, which reported 85 million user homes at the end of Q3, has seen its share price rise 26% since Nov. 26, ending last week at over $84 a share, with several equity analysts predicting a premium-price purchase of the company in 2025.

First, Guggenheim issued a note to investors early last week, predicting that The Trade Desk would swoop in and acquire Roku.

It’s an investor note, Guggenheim suggested that while the advanced advertising company still strongly declares itself a Roku partner, it also recently announced formation of a rival TVOS platform.

“We believe TTD could rapidly scale its OS ambitions via Roku’s 85 million-plus global streaming household footprint, while Roku could quickly leverage its first-party viewer data and expand connected-TV inventory to match with growing advertising demand,” Guggenheim wrote.

The investment bank’s missive was matched by Needham & Company’s Laura Martin, who following Walmart’s successful closure of its $2.3 billion purchase of smart TV and TVOS company Vizio, put a “buy” rating on Roku and set a price target for the stock at $100 a share.

“Walmart has told you by buying Vizio that these large retailers need a connected television advertising platform to tie purchases to,” Martin said in a TV interview with Bloomberg (video replay here). “That means Target and other large retailers have that reason to buy Roku to tie Roku’s connected television ad units to their sales in their retail stores. And by the way, Roku has much higher margins than any retailer.”

Moving on from retailers, the Needham analyst also noted The Trade Desk’s TVOS ambitions. “It’s almost impossible to build these [TVOS platforms] now,” she said. “Roku has an installed base of 85 million operating systems in consumers’ homes watching four hours of TV a day.”

Martin also mentioned Amazon as a particularly strong potential Roku suitor, noting that large language models operated by tech giants including Amazon are “running out of data points to feed them.

"Roku has a lot of first-party data. And Amazon could tie the advertising of Roku to purchases. So there’s a lot of potential purchasers here,” she continued.