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Investing.com -- Loop Capital upgraded Roku (NASDAQ:ROKU) Inc to Buy from Hold saying that a new advertising partnership with Amazon (NASDAQ:AMZN) will begin to lift the streaming platform’s financial results starting in 2026.
The brokerage said the collaboration announced earlier in the day would give Roku deeper integration with Amazon’s demand-side ad platform (DSP), allowing advertisers to target and measure campaigns more precisely using shared data across an estimated 80 million U.S. households.
While Roku has previously worked with major DSPs such as Trade Desk (NASDAQ:TTD), Google (NASDAQ:GOOGL), and Yahoo, Loop said the Amazon deal marks its deepest integration to date.
Early tests reportedly showed advertisers reached 40% more unique viewers without increasing budgets and saw reduced ad repetition.
The feature is expected to become available to U.S. advertisers using Amazon’s DSP in the fourth quarter. The companies did not disclose terms of the agreement.
Loop raised its 2026 revenue and EBITDA estimates for Roku by about 5%, and increased its price target to $100 from $80.
It now forecasts Roku’s platform revenue to grow 15% next year, helped by the Amazon integration and political advertising in the fourth quarter.
The brokerage noted that Roku shares are trading at about 2.3 times estimated 2025 revenue, near their three-year median, and that the company has generated positive free cash flow since 2023.
Roku has previously said it aims to return to mid-teens EBITDA margins, last reached in 2021 through cost controls. Loop expects valuation to eventually shift to an earnings-based multiple as profitability improves.