Roku (NASDAQ: ROKU) has been on a tear this year. Shares are up 389% year-to-date, and have surged 48.62% over the last month.
And according to an analyst at William Blair, Roku’s streaming business is growing at a faster clip than Netflix (NASDAQ: NFLX) was at a similar stage in its life.
“In our view, Roku will experience similar phased stages of international growth as Netflix did during its international expansion,” analyst Ralph Schackart wrote in a note to clients on Tuesday.
The firm expects Roku’s user base will more than double to 80 million active accounts by 2025.
Roku, which sells streaming devices with thousands of available channels and provides an operating system for smart TVs, topped expectations on its second-quarter earnings report earlier this month. In the report, the company boasted 39% user growth with 30.5 million active users in the quarter, 1.4 million more than it had in Q1.
Schackart says that Roku’s active account growth is tracking ahead of Netflix at the same stage.
“Looking at Roku’s most recent nine quarters against those of Netflix in the beginning stages of Phase II, Roku, on average, achieved 9% quarter-over-quarter growth, compared with Netflix’s average of 8%,” the analyst wrote.
In addition to the 80 million subscribers Schackart predicts, the analyst estimates Roku’s revenue will reach $4.5 billion by 2025, of which 89% will be earned domestically. That would mean that average revenue per user will reach $58 by 2025, which implies a compound annual growth rate of 16% from 2019 to 2025, according to the firm.
Schackart rates the stock an Outperform and while he doesn’t have an official price target for Roku stock, he says shares have “100%-plus stock upside potential” through 2024.
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