Ziv Israel maintained a Buy rating on Roku with a price target lifted from $150 to $160.
Roku's Black Friday deals include its typical discounts on streaming devices along with three new smart TV models sold under Walmart Inc's (NYSE: WMT) Onn brand, Israel said in a Friday note.
Encouragingly the TVs are priced at around half the price point of other TVs with similar attributes, and Roku's exposure to Walmart implies a highly competitive product, the analyst said.
Other positive takeaways from the Black Friday deals include the lowering of Roku's reliance on a specific TV maker and a Hulu promotion that should support higher AVOD viewing hours, according to BofA.
The combination of a lower device average selling price on a smart TV implies Roku is set up for "outsized" account growth in the fourth quarter, Israel said.
The analyst is estimating that fourth-quarter active account adds will total 3.5 million, and revenue will come in at $390 million, at the higher end of Roku's guidance.
BofA's revised $160 price target is based on a multiple of 12 times EV/fiscal 2020 revenue estimate of $1.512 billion.
Roku shares were up 4.53% at $155.43 at the time of publication.
Photo courtesy of Roku.