Wall Street analysts on Wednesday went shopping for bargains among discounted consumer electronics stocks after Christmas. Roku stock and Control4 stock were two of their picks.
XNeedham analyst Laura Martin named Roku (ROKU) her "top pick for 2019." She rates Roku stock as buy with a price target of 45. Roku stock rose 11.7% to 30.35 on the stock market today.
D.A. Davidson analyst Tom Forte reiterated his buy rating on Control4 stock with a price target of 41. Control4 stock climbed 7.6% to 17.26 on Wednesday.
Martin likes Roku because of its strategic position in the fast-growing over-the-top internet television market. Roku has created a large ecosystem with its streaming video platform and has carved out a niche in advertiser-supported internet video.
Roku Could Be Acquisition Target
In the third quarter, Roku reached 24 million unique active accounts or households, up 43% year over year. About 10% of U.S. TV viewers ages 18 to 34 are now on Roku. Also, 10 million of Roku's users do not have a linear TV bundle.
"The best way for an advertiser to reach these consumers is to buy ads on Roku," she said. "As viewers cut the cord, advertisers must follow viewers to platforms where they spend time."
Martin added, "Roku is becoming broadly accepted by large TV ecosystem companies as an integral cog in the streaming/OTT future."
Roku could become an acquisition target, she added.
The Los Gatos, Calif.-based company sells set-top boxes and dongles for users to access internet video services such as Netflix (NFLX) and Hulu. It also licenses a smart TV operating system to television manufacturers. It gets most of its revenue selling advertising on its platform.
Control4 Stock Deemed Oversold
The pullback in Control4 stock over the past few months provides "an attractive entry point into a company that is incredibly well positioned to leverage shifting consumer demand toward connected home products," Forte said.
He called the sell-off "overdone."
Investors are not giving the company enough credit for its ability to mitigate tariff risks and any softness in housing starts, he said.
The Salt Lake City-based company sells smart-home technologies. Its automation and networking devices can control lighting, heating, air conditioning, security, music and other systems.
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The post Roku Stock Labeled 'Top Pick,' Control4 Stock Called Buy appeared first on Investor's Business Daily.
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