Roku is still leading the connected television market over Amazon and Apple, according to Deutsche Bank analyst Jeffrey Rand.
Citing survey results from Deutsche Bank’s Data Innovation Group of 1,048 U.S. consumers, Rand wrote in a note Thursday that Roku remains the market leader in the U.S., followed by Amazon Fire TV. According to Rand, 43% of participants who had a connected TV had a Roku, while 35% had Amazon Fire TV. Apple TV sat at 27%. He notes that some people may have one of each.
Roku makes money selling its devices that let users access streaming services. It also gets a cut from advertising and subscriptions that are delivered via its platform.
“Of note, Roku had pretty consistent ownership across income levels, between 40-50%,” among the 1,048 U.S. consumers surveyed, he wrote. “Apple TV on the other hand, not surprisingly due to the high price point, had significantly higher ownership levels in the $100K and up income level and tied with Roku for the most ownership in this income level.”
Roku stock (ticker: ROKU) fell 2% to $160.97 on Thursday, but held onto most of its gain from the prior trading day. Keep in mind the stock jumped $16.51, or 11%, on Wednesday following a fresh Buy rating from Citi Research.
Rand wrote Thursday that survey data indicating that adoption of connected TV devices is steady, with about a mid-30% adoption rate across age groups.
Another takeaway from the survey was that Roku had the highest satisfaction rate, with 54% of participants rating the quality of their Roku a six or better out of 10. Amazon Fire TV sat a 53%, while Apple was at 38%.
“Also interesting, consumers with higher incomes tend to be more positive on their device experiences, but this could be tied to higher income consumers having more premium subscriptions to stream on their devices, which tend to offer a wider breadth of popular content and no commercials,” he wrote.
Rand has a Buy rating on Roku stock with a $185 price target. The stock’s average price target is $164.64. Of the 23 analysts listed by FactSet, about 15 have Buy ratings and six have Hold ratings.
Write to Connor Smith at connor.smith@barrons.com
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August 28, 2020 at 06:44AM
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Roku Is Still a Leader in the Streaming-Device Wars. That Will Boost the Stock, One Analyst Says. - Barron's
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