Roku Inc has lost some 40% in less than three months but a Wedbush Securities analyst is convinced the story moving forward will be a different one. 

Michael Pachter continues to rate the streaming company at “outperform” and sees upside in its shares to $80 which suggests a more than 30% upside from here. 

The analyst is bullish on Roku stock because it has “found religion in generating and expanding [free cash flow]”. 

He’s convinced that the Nasdaq-listed firm will “not revert to excessive spending for long-term growth”. 

The bullish call arrives a couple of days before $ROKU is scheduled to post its earnings report for the first quarter. Consensus is for it to lose 64 cents a share versus $1.38 per share a year ago. 

Michael Pachter recommends owning shares of Roku Inc because it’s taking advantage of ad dollars moving from linear to digital-connected TV. His research note also reads:

“Roku intends to balance new initiatives that result in near-term ROI with expanding FCF and tracking toward positive net income.”

Note that Wedbush is not the only investment firm that’s keeping bullish on Roku stock. Daniel Kurnos of Benchmark also sees upside in the $8.7 billion company based out of San Jose, California to $115 per share. 

Note that $ROKU is currently trading just below its 61.8% fibonacci retracement that’s acting as a resistance.

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