Roku may be unstoppable, 'ideally positioned' to become leader in streaming content

Brian Sozzi

It’s hard to envision what will stop Roku’s momentum as more and more people cut the cord or never even sign up for cable services and instead, stream content on the cheap and on demand.

And that invincibility continues to get priced into Roku’s stock (ROKU).

Shares of the streaming giant exploded 21% in early Thursday trading after the company again hit all the right notes on earnings day. Some quick analytical highlights from the second quarter that no doubt have investors jazzed up:

  • Roku’s active accounts crossed 30 million for the first time.

  • Average revenue per user surpassed $20 for the first time.

  • The company added 1.4 million new subscribers compared to the first quarter.

  • Roku raised its full-year adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) to $30 million to $40 million from $10 million to $20 million. The company credited an “accelerating” shift to streaming services.

  • Roku inked a new deal to provide Walmart with audio equipment under the retailer’s private label ONN electronics brand.

“It was another great quarter indeed and there are certainly a lot of trends moving toward streaming and we are ideally positioned as the leading streaming platform — we are very happy with the trajectory fo the business,” Roku Chief Financial Officer Steve Louden said on Yahoo Finance’s The First Trade. “The streaming hours on the platform continue to go up rapidly.”

Roku’s stock is now up 160% in the past year. By this time next year based on its consistently strong growth rates, that stock price performance may read up 320% over a two-year timeframe.

Brian Sozzi is an editor-at-large and co-host of The First Trade at Yahoo Finance. Follow him on Twitter @BrianSozzi

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