Roku (ROKU) has a clear path to significant operating leverage amid an "underappreciated" runway and improving profitability, Wedbush said in a note Friday.

"With the OPEX base now rightsized, and Platform revenue projected to grow in the double digits, incremental margins are expanding rapidly," it said. OPEX is operational expenditure.

The report also pointed to its substantial balance of net operating losses that will act as a tax shield, allowing pre-tax income to be converted into distributable cash.

"With a clean balance sheet and improving liquidity, we

believe the company is now well-positioned to accelerate share buybacks," the report said.

For its Q4 results due Feb. 12, Wedbush analysts see upside potential to revenue estimate of $1.350 billion, expecting its results to underscore its increasingly diversified business model.

Wedbush has an outperform rating and $130 price target.

Price: 86.85, Change: +0.79, Percent Change: +0.91