By Emily Dattilo

It's time to add Roku stock to the holiday wish list, one Wall Street team argued on Wednesday.

The reason? Walmart on Tuesday completed its $2.3 billion acquisition of Vizio, the smart-TV company, which it announced earlier this year, wrote Needham analysts Laura Martin and Dan Medina. They rate Roku at Buy with a price target of $100.

Roku stock gained 6.2% to $80.35 in early trading. This year, shares have fallen about 12%.

The team sees the maker of streaming devices and software as an acquisition opportunity. It listed several categories of possible purchasers, including streamers such as Netflix, connected TV ad buyers like Trade Desk, retailers such as Target, and finally, companies ranging from Amazon.com to Microsoft using large language models who are in the market for "billions of new data points daily."

Needham offered a slate of reasons to acquire Roku, including the high amount of households using its products. As of the end of September, Roku had TVs in 85 million homes across the globe, dwarfing the installed base of Vizio, the analysts noted, adding that other reasons to buy include pricing power and shelf space.

Needham isn't the only Wall Street team looking at Roku.

Earlier this week, Guggenheim analysts led by Michael Morris, who rate Roku at Buy with a price target of $78, weighed in on Trade Desk's announcement of a new operating system for connected TVs. He said he believes the system, to be called Ventura, would pair well with Roku.

"We believe that the positives of a vertical integration between TTD and Roku outweigh the incremental challenges and would best position each entity most effectively compete in the CTV market for the long term and to maximize entity value," he wrote on Monday.

Write to Emily Dattilo at emily.dattilo@dowjones.com

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December 04, 2024 10:16 ET (15:16 GMT)

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