Benchmark Co. has reaffirmed its bullish stance on Roku, Inc. (NASDAQ: ROKU) by maintaining its “Buy” rating and $105 price target for its shares. This decision comes amidst a recent shift in market sentiment towards Roku, with the stock experiencing a decline in early July 2024.

An earlier sell-side report in June 2024 highlighted concerns about declining cost per thousand impressions (CPMs) for Roku, which reflects advertising revenue generation. This report and broader market anxieties contributed to a temporary downturn in Roku’s share price.

However, Benchmark’s continued confidence in Roku underscores its belief in its long-term growth prospects. They acknowledge that Roku may not achieve profitability within the current fiscal year. However, they emphasize the company’s impressive revenue growth momentum, with a noteworthy 15.68% increase year-over-year observed in the first quarter of 2024.

Furthermore, Benchmark analysts point to Roku’s ability to expand its top line (revenue) even within a competitive landscape. This is evidenced by the 18.96% increase in quarterly revenue during Q1 2024, showcasing Roku’s effectiveness in capturing market share.

While Roku does not offer dividends to its shareholders, the company’s decision to reinvest profits into the business signifies a commitment to future growth. Additionally, Roku boasts a healthy market capitalization of $9.1 billion, reflecting investor confidence in the company’s potential.

Benchmark’s unwavering support for Roku highlights the company’s strategic positioning within the streaming device market. Despite facing short-term headwinds and market fluctuations, Roku’s focus on revenue growth, market share expansion, and strategic reinvestment suggests a promising long-term trajectory.

The coming quarters will determine whether Roku can maintain its impressive growth momentum and achieve profitability. Benchmark’s continued “Buy” rating and $105 price target indicate their confidence in Roku’s ability to navigate the current market environment and emerge as a leader in the streaming device industry.