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Roku surges, Netflix slides, on analyst report

People pass by with the logo for Roku, a Fox-backed video streaming firm, that held it's IPO at the Nasdaq Marketsite in New York, September 28, 2017.

Brendan McDermid | Reuters

Shares of Roku jumped 9% on Wednesday after Macquarie predicted the company could experience Netflix-like growth overseas.

Roku stands to triple its user base in the next three years by expanding into international markets, while benefiting from "powerful growth" in connected TV devices and advertising, Macquarie analysts said in a note to clients. Roku could reach 72 million users in 2022, up from the 30.5 million active users it reported in the second quarter.

"We know little about the international roll-out plans, or costs beyond this year, which we assume emerge as marketing demand emerge, "said Macquarie analyst Tim Nollen. "Roku's growth trajectory could well have been echoed by Netflix's, which has also been over 3 years."

Macquarie upgraded Roku stock price to outperform from his price target to $ 1

30 from $ 110.

Roku is ordinarily known for its set-top boxes, which aggregate TV shows and movies from a variety of content makers. The company also licenses its technology to TV manufacturers who install it into smart TV models. Last month, Roku announced its first licensing agreement in Europe.

Roku's shares have more than quadrupled in 2019 and have risen nearly 14% in the past three months. Meanwhile, Netflix's stock has taken 29.5% in the previous three months.

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