Roku slips even as Oppenheimer sees larger market in 2023
Justin Sullivan

Roku (NASDAQ:ROKU) shares slipped 1% Wednesday even as Oppenheimer analyst Jason Helfstein said there was likely an "inflection" coming in the first half of next year for the connected streaming company.
Helfstein, who has an outperform rating and a $70-a-share price target on Roku (ROKU), noted that Charlie Collier, Roku's (ROKU) new President of Media and the former CEO of Fox Entertainment, will likely open up advertising inventory to third-party demand side platforms like The Trade Desk (NASDAQ:TTD) and Google (NASDAQ:GOOG) (NASDAQ:GOOGL). There's also the belief that higher bidding could lead to increased ad rates, thus giving brands more frequency capping and targeting.
Helfstein also noted that Roku (ROKU) may likely start to re-sell a "very small" percentage of new advertising video-on-demand services, such as Netflix (NFLX), Disney's (DIS) Disney+ and Warner Bros. Discovery's (WBD) HBO Max as "compensation for being supported on the platform."
"We are forecasting global [connected TV] will reach 42% of TV spend or 9.7% of digital media," Helfstein wrote in a note to clients. "While Roku has lost share of US CTV from its 2021 peak, we think [third-party demand side platforms] integration reverses this trend." 
The analyst added that third-party demand side platforms could result in ad revenue upside, perhaps as much as a 40% increase in cost-per-thousand pricing, based on comments from The Trade Desk's (TTD) Investor Day and help stabilize Roku's (ROKU) quarterly ad revenue volatility. 
"Assuming [first-half of 2023] is spent onboarding, we see +13%/26% to our current â23/â24 platform revenue estimates," Helfstein explained, adding that "CPM upside would drive [150 basis points] of more Global CTV share gains by â26."
Late last month, KeyBanc Capital Markets downgraded Roku (ROKU), citing several worries, including a decline in market share for the connected streaming company and a loss of importance for its partners.