Key Takeaways

Roku ( ROKU ) shares popped Friday after Guggenheim analysts reportedly upgraded the stock to "buy" from "neutral."

The streaming technology company’s stock rallied nearly 12% following the report, with Guggenheim's price target of $75 representing a nearly 8% premium to Friday's closing price of $69.14.

Guggenheim Says Roku Has Improved Monetization Efforts

Guggenheim analyst Michael Morris said Roku has improved its monetization efforts, which shifted his outlook on the company.

“We have had concerns about the strategy to drive incremental monetization,” Morris said in an interview with CNBC. “About two years ago, they started reinvigorating the leadership team… Now, I think we are really at the start of seeing the fruits of that labor, specifically broadening their ability to monetize their video advertising inventory.”

Morris also pointed to the potential for Roku to better monetize its home screen, with the company ending the second quarter with nearly 84 million streaming households.

Despite Friday's rally, Roku stock has yet to fully recover from the losses it endured following the release of its fourth-quarter results in February, when the company reported a drop in average user spending and warned of "near-term challenges in the macro environment.” The stock has lost nearly one-quarter of its value since the start of the year.

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