Roku, Inc. acquired shares. (ROKU) 4.37% in extended hours trading Wednesday after the $ 41.36 billion digital media company announced it had reached an agreement with WarnerMedia to stream HBO Max content across their devices.
Although Roku and WarnerMedia – a subsidiary of communications giant AT&T Inc. – did not appear. (T) – Specific details of the settlement, both sides said they were happy to find a contract that had been on the table since May. The company hopes the release of high-quality content on its platform will support its strong 46 million active membership base and capture market share from Netflix, Walt Disney’s Disney +, and Comcast’s Peacock.
“We believe that all entertainment will be broadcast, and we are delighted to partner with HBO Max to bring their incredible library of iconic entertainment brands and acclaimed slate directly to theater distribution. to Roku homes with more than 100 million people made Roku the No. 1 TV streaming platform in America, ”said the company’s platform business manager Scott Rosenberg, according to Wire Industry.
As of December 17, 2020, Roku stock has risen 143.33% year to date (YTD), gaining around 40% in the last month alone. Like many streaming stocks, the company continues to benefit from people spending more time at home during the pandemic watching the latest major films and hitting TV shows.
Wall Street view
Earlier this month, Citi’s Jason Bazinet hit the investment bank’s price target on the stock to $ 375 from $ 220 while maintaining its ‘Buy’ recommendation. The analyst sees distribution deals, such as the HBO Max contract, and expansion into international markets as a tool for further growth. In addition, Bazinet puts the enterprise value of each active Roku account at $ 619, based on platform margins. Most other breakdowns on the Street have a bullish outlook. It receives 16 ‘Buy’ ratings, 9 ‘Hold’ ratings, 1 ‘Underweight’ ratings, and 1 ‘Sell’ ratings.
Although a number of sales side analysts were included in the HBO Max vehicle deal, the stock may draw further updates in the coming weeks due to the time of the contract ahead of content that is highly anticipated as “Wonder Woman 1984,” which will appear on HBO Max and Christmas theaters. Day.
Technical forecast and trading strategies
After kicking off support at $ 196 in early November, Roku shares have risen significantly. While the stock is prone to short-term correction, active traders should focus on playing upside down, recalling the old Wall Street adage – “your friend is the move. ” To use this strategy, consider using a fast-moving average, such as the 15-day SMA, as a stop-loss to let profits run. Just leave the trade when the price closes below the mark.
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