A new partnership is beginning to take shape at streaming hardware maker Roku (NASDAQ:ROKU), and it’s actually pretty clever. However, this cleverness wasn’t well-received by investors, who took a look at it and sent shares down fractionally in Tuesday afternoon’s trading.
Just yesterday, we talked about Roku’s plan to augment its advertising by installing video ads on the home screen. This was really just an incremental improvement over its previous plans, which were generally limited to static advertisements. In fact, we also heard that Roku was considering the use of themed content hubs in a bid to better segment its market and target them with advertising accordingly.
Now we have a better idea of just how it will work, as Roku announced it was teaming up with The Trade Desk (NASDAQ:TTD) to use the raw audience and behavioral data Roku users generate to produce actionable insights.
It Didn’t Stop There
Not only is Roku turning to The Trade Desk—which Disney (NYSE:DIS) announced it would do just over a month ago—Roku is also looking to iSpot.tv to offer “mutual access” to each other’s “cross-platform audience data.” That should make the insights even more valuable and, potentially, better monetized.
Further, likely in a bid to start on that “themed content hub” concept, Roku is working with NBC (NASDAQ:CMCSA) to create a home screen destination for Summer Olympic content. The destination will offer access to some streaming events, a live medal count tracker system, and other “Olympic-related content.”
Is Roku a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ROKU stock based on eight Buys, 10 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 3.4% rally in its share price over the past year, the average ROKU price target of $86.69 per share implies 48.09% upside potential.
