Roku (ROKU, Financials) stock saw a double-digit increase, attracting attention from big players in the streaming and technology industries as analysts at Needham said the business is a possible takeover candidate. Still, Roku's shares are down 5% in the year while the S&P 500 is up 28%.

Additionally discussed was Roku's relationship with The Trade Desk, with the latter now developing its connected TV operating system, Ventura, scheduled for a public release latter half of next year. Needham analysts cautioned Roku to keep the uniqueness of its data, thus maybe requiring interested parties to pay a premium for access.

Third quarter average watching time for Roku users per household was 4.3 hours, demonstrating great customer involvement. The potential value of this data is expected to rise noticeably as algorithms develop. Emphasizing Roku's great position in the connected TV ecosystem, Needham analysts pointed out that one of its most undervalued assets is its data, which has never been monetized individually.

With super-voting shares, Anthony Wood, Roku's creator and CEO, is a major determinant of its prospective purchase. Unlike other players whose platforms are not for sale, convincing Wood to sell might result in a quick takeover of Roku.

Among the main factors mentioned as making Roku appealing are its existing user base, unique data sets, pricing power, retail shelf space, and benefits of acquiring rather than constructing its own platform. Based on Needham's December 4 report, Roku is the only scalable connected TV platform that would be worth purchasing.

Especially if legislative changes take place in 2025, Roku's particular market position and assets as well as the control of its creator might make it a desirable purchase target, Needham said.