Roku (NASDAQ: ROKU) announced a transformative partnership with Amazon (NASDAQ: AMZN) on Monday, leading to a nearly 10% increase in its stock price as of the week’s end. The deal grants Amazon advertisers access to Roku’s reach of approximately 80 million U.S. households, improving viewer reach by 40% with the same ad budget.
Following the announcement, analyst upgrades ensued, including Loop Capital raising its price target from $80 to $100, and BofA matching that target. Roku, which has seen its shares rise 55% over the past year and is on track for projected profitability in the second half of 2023, has previously faced profitability challenges, with a projected net loss of $30 million for the year.
In Q1, Roku posted a $27 million loss, targeting a $25 million loss for Q2. Despite these losses, Roku is expected to generate $22 million in profit over the latter half of the year after a robust performance in free cash flow and adjusted EBITDA.
