Please ensure Javascript is enabled for purposes of website accessibility

Why Roku Stock Skyrocketed Thursday

By Daniel Sparks – May 9, 2019 at 11:06AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The streaming-TV company's first quarter featured accelerating revenue growth and inspired a rosy outlook from management.

What happened

Shares of streaming-TV company Roku (ROKU 0.04%) surged on Thursday, rising 19% as of 10:00 a.m. EDT.

The stock's gain follows the release of Roku's strong first-quarter results, which boasted better-than-expected revenue and a narrower-than-anticipated loss per share.

A chalkboard sketch of a bar chart highlighting a growth trend

Image source: Getty Images.

So what

The company's first-quarter revenue rose 51% year over year to $206.7 million. This easily beat management's guidance for first-quarter revenue of $185 million to $190 million. The figure also crushed a consensus analyst estimate for revenue of $192 million.

Roku's loss per share widened from $0.07 in the year-ago quarter to $0.09. But the figure was narrower than analysts' average forecast for a loss per share of $0.24.

"The strength of our brand, the scale of our active account base, the advantages of our purpose-built streaming OS, and the engagement of our users make Roku an increasingly important partner for content publishers, advertisers and TV manufacturers," said Roku management in the company's first-quarter shareholder letter.

Now what

Also likely fueling the Street's positive response to the first-quarter results is management's decision to boost its outlook for the full year. Management now expects 2019 revenue between $1.03 billion and $1.05 billion, up from previous guidance for revenue between $1.0 billion and $1.025 billion. In addition, Roku now expects adjusted EBITDA in 2019 to be between $10 million and $20 million, up from a previous forecast of between negative $5 million and positive $5 million.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool recommends Roku. The Motley Fool has a disclosure policy.

Stocks Mentioned

Roku Stock Quote
Roku
ROKU
$51.22 (0.04%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.