Roku shares will turn around after a disappointing start this year, according to one Wall Street analyst.

Macquarie Research initiated coverage on Roku with an outperform rating, citing the company’s strong position in the growing streaming video market.

The company sells streaming video players and licenses its operating system to television manufacturers, which enables consumers to watch video content over the internet.

“Disintermediation of television content and services leaves Roku in a position to capitalize on its role as a new-age intermediary,” analyst Paul Golding said in a note to clients Thursday. “Given higher margin, scalable platform business, 2020 earnings should jump” for the company.

Roku shares rose slightly in early trading Thursday. The company’s stock is down 16 percent so far in 2018 through Wednesday versus the S&P 500’s 4 percent return.

Golding started his price target at $49 for Roku shares, representing 13 percent upside to Wednesday’s close.

The analyst cited research firm Kagan’s forecast of 176 million North American video streaming subscribers by 2021 from 144 million last year. He noted the company’s Roku Channel is among the top three most-viewed ad-supported channels on its platform.

“Roku acts as an independent digital content distributor, which content publishers prefer given Google, Amazon, and Apple’s own services (or forthcoming services) which could make them partial to their own offerings,” he said.

Golding forecasts the company will generate 57 cents of earnings per share in 2020 after two years of losses in 2018 and 2019.

— CNBC’s Michael Bloom contributed to this story.