Shares of TV-streaming service Roku, Inc. (ROKU) rose sharply Monday after the management released its bullish estimate for the fourth quarter, marked by a 40% growth in the number of active accounts. The preliminary results, announced in the run-up to the company’s presentation at the Consumer Electronics Show in Las Vegas, showed that the number of streaming hours surged 68% to 7.3 billion hours during the quarter. The outcome far exceeded analysts’ forecast.
Taking a cue from the steady growth of the over-the-top video streaming business and Roku’s expanding user base, market watchers expect that the ongoing recovery will gather further momentum in the coming weeks, which makes the stock an ideal investment option.
The number of streaming hours surged 68% to 7.3 billion hours in the fourth quarter, surpassing analysts’ forecast
The impressive user count will attract more advertisers and content providers who want to use Roku’s platform as a medium. However, investors are cautioned that uncertainties associated with the Beijing-Washington trade war could play spoilsport, reversing the current rally and dragging the stock to the lows seen last month. Most of the analysts who cover Roku recommend a buy, followed by overweight. Their average price target is $59.62.
The final results for the fourth quarter are scheduled to be released in the first week of next month. Earlier in the day, Roku said television manufacturer Westinghouse Electronics will join its TV licensing program.
Roku stock rises as it adds premium subscriptions to The Roku Channel
Roku’s TV streaming hardware allows viewers to access and search a huge collection of movies and videos on multiple streaming platforms, offering a hassle-free viewing experience in a cost-effective manner.
Roku shares have been in a free fall since October last year after hitting a record high. They opened Monday’s trading sharply higher and gained about 24%. Registering one of the biggest intra-day gains in recent times, the stock crossed the $40-mark during the session after staying below that level for more than a month.