Roku shares rose 2.7% in premarket trading on Friday after Oppenheimer moved the stock from Perform to Outperform and set a $105 price target. The advance comes after Roku's share price dropped by roughly 25% over the prior month.
Oppenheimer highlighted a collection of revenue drivers that underpin its more favorable view. At the center is Roku's advertising alliance with Amazon - a demand-side platform partnership that the brokerage expects to gain momentum over the course of the year. That agreement both expands advertiser access to Roku's sizable connected-TV audience and allows Roku to leverage Amazon's data for ad measurement and targeting. Oppenheimer projects the arrangement could contribute about $25 million in additional revenue, equivalent to approximately a 1% upside for 2026.
The firm also pointed to event-related and content-related catalysts. Higher advertiser interest around the Winter Olympics and the addition of NBCUniversal's Peacock subscription service on Roku's platform are cited as potential incremental supports for advertising and platform monetization. Oppenheimer noted that search interest tied to the Winter Olympics is running about 20% ahead of prior events, which the brokerage estimates could boost first-quarter platform revenue growth by roughly 400 basis points and add about 1 percentage point to Roku's full-year 2026 platform growth.
Political advertising in the midterm cycle is another expected contributor. Oppenheimer projects roughly $45 million in political-ad revenue for 2026, representing about 1% of platform revenue.
On core platform growth, Oppenheimer's baseline anticipates platform revenue increasing 15% in 2026 and 16% in 2027, excluding political advertising and certain one-off items, a pace the firm says is modestly above consensus. In a scenario Oppenheimer describes as more optimistic - driven by stronger Amazon partnership traction and the Olympics effect - growth could reach 17% for 2026 and remain at 16% in 2027.
The brokerage also flagged valuation as a supporting factor for its upgrade. It observed that Roku's shares are trading near the low end of recent valuation ranges and close to one-year lows on forward EBITDA multiples.
Context for market participants
- Connected TV remains one of the fastest-growing advertising channels as budgets shift away from linear television to streaming platforms. Roku's scale and user engagement position it among the likely beneficiaries of that shift.
- Oppenheimer highlighted that the Amazon partnership provides advertisers access to a combined reach of roughly 80 million U.S. households through Amazon's platform, expanding the potential addressable audience for advertisers working with Roku.
Investors should weigh the potential upside from these catalysts against recent share weakness and prevailing valuation levels when assessing Roku's risk-reward profile.