12:00 PM EDT, 10/29/2024 (MT Newswires) -- Roku's ( ROKU ) recent stock outperformance, with shares up about 35% since releasing Q2 results on Aug. 1, reflects a "strong" ad market and expected upside to platform revenue growth, Morgan Stanley said in a note Tuesday.

But the investment bank said it sees "strong and rising competition as an underappreciated risk."

"We see an increasingly competitive [connected TV] advertising market, risk to medium-term platform segment gross profit expectations, and limited valuation support," Morgan Stanley said.

The firm said a competitive and crowded connected TV market may further lead to increased pricing pressure for ad inventory sold via Roku's ( ROKU ) owned and operated The Roku Channel, which is projected to sell below 50% of its available ad impressions.

Morgan Stanley boosted its price target on Roku ( ROKU ) to $65 from $60 and maintained its underweight rating.

Price: 76.66, Change: +0.61, Percent Change: +0.80