A New Upgrade Has Boosted Roku Stock. 

Roku +4.83% stock gained yesterday following an upgrade from analysts at Susquehanna Capital Markets, who see multiple reasons for investors to be optimistic about the future of the streaming device and software maker. The analysts see multiple reasons for investors to be optimistic about Roku ROKU +4.83% stock.

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According to analysts, led by Shyam Patil, Roku stocks rose 3.5% in pre-market trading on Monday after the company was upgraded to positive from neutral from the stock's current status. On Friday, the shares closed at $60, while their target price for the stock for the coming year was $75.

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“There are still a number of long-term drivers to the market, while near-term business fundamentals appear to be bottoming in the near term,” Patil noted in a note. “It continues to be our belief that Roku remains the prime beneficiary of the secular shift from linear budgets to connected TVs in the long run despite the near-term noise, regardless of what happens in the near-term. According to our analysis, the majority of the opportunity that the company has is still ahead of it."

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It seems to me that the balance of risks and potential rewards linked to Roku stock is attractive since the market has improved through the current quarter after a trough at the end of the previous year, an appropriate valuation reset, and secular trends in connected devices have made it attractive.

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In the broader CTV market, Patil said, "we found that overall conditions are good and this should be a tailwind that drives growth in the coming year", adding that "the majority of U.S. advertisers expect to prioritize connected TVs as well as linear TV in a hybrid format.".