Roku Positioned Well for COVID-19 Shut-Ins, Says Analyst

Wedbush lowered its target share price for Roku to $86 from $115 Monday, saying the company's road to profitability is “unclear.” But the streaming platform provider is potentially a “big winner during social distancing and quarantines,” wrote Michael Pachter to investors, saying all subscription VOD and advertising VOD are “well-positioned” at a time when governments are urging social distancing or mandated quarantines. Roku is in a strong position due to revenue share agreements with most SVOD and transactional VOD partners, Pachter said. It and other platforms that host Oscar-nominated films for purchase or rental can benefit from the current climate, with people more likely to watch many of the nominated films for a fee than they would be under normal circumstances, said the analyst. Roku likely is benefiting from its subscription services by signing up users to HBO, Showtime and other premium SVOD suppliers, he said. A downside of the COVID-19 period for streamers and studios is that productions of current film and serial content have halted. Shares closed up 17.5% at $89.46.