By any yardstick you care to use, Roku (NASDAQ:ROKU) has absolutely been on fire over the past year. The stock has more than doubled during the preceding 12 months and has more than tripled so far in 2019 as its streaming business continues to gain converts.

Expectations will be high when the company reports the results of its second quarter after the market closes on Wednesday, Aug. 7. Let's look at a number of areas that investors will be watching closely.

A TV featuring The Roku Channel and a number of premium subscription offerings from Showtime, Starz, Epix, and more.

Image source: Roku.

Revenue growth

Roku has generated revenue growth that's nothing short of extraordinary. Last year, revenue increased by 45% -- an acceleration from the 29% growth it generated in 2017. In the first quarter, its impressive climb continued, as revenue grew by 51% year over year, accelerating from the 36% gain in the prior-year quarter.

In the wake of its better-than-expected performance, Roku raised its full-year guidance. The company is now expecting revenue of about $1.04 billion this year, up 40% year over year at the midpoint of its guidance. Analysts' consensus estimates are calling for revenue of $1.05 billion, which is at the high end of management's forecast.

For the second quarter, management has guided for revenue in a range of $220 million to $225 million, which would represent growth of between 40% and 43% year over year.

Investors will be watching closely to see whether Roku's frantic pace of growth continues.

Elusive profitability

It's no secret that profits remain elusive for Roku, but that's by design. Management recognizes that it's facing a once-in-a-generation opportunity as the secular trends of cord-cutting and streaming take hold. Its platform is one of the leading providers of ad-supported streaming video, and the company doesn't plan on letting that opportunity pass it by.

For the second quarter, Roku is expecting a net loss of between $25 million and $30 million, compared to a loss of $6.6 billion in the prior-year quarter, as the company continues to invest heavily in its market share growth. On an adjusted basis, Roku is guiding for earnings before interest, taxes, depreciation, and amortization (EBITDA) of negative $5 million to negative $10 million, compared to adjusted EBITDA near breakeven in the prior-year quarter.

Investors will be watching to see how quickly losses are mounting.

A family sitting on the couch watching television.

Image source: Getty Images.

User and streaming metrics

The biggest driver of Roku's business over the past couple of years has been robust growth in both active accounts and streaming hours. Several things have positively impacted those gains.

The company added its own streaming option -- The Roku Channel -- about two years ago, which has helped boost account growth and drive its advertising business. In the first quarter, active accounts grew to 29.1 million, up 40% year over year, while streaming hours soared to 8.9 billion, up 74% compared to the prior-year quarter. This drove average revenue per user (ARPU) to $19.06, up 27% year over year. Engagement also shined, as per-household streaming grew to 3.5 hours per day, which represents nearly half of average U.S. per-household daily viewing, according to Roku.

Another contributor to its massive growth is the company's connected-TV operating system (OS). Unlike many competitors, Roku designed its OS from the ground up rather than modifying an existing one from a mobile device. A growing list of manufacturers are including the Roku OS in their connected TVs. "We estimate that in Q1 2019, more than one-in-three smart TVs sold in the U.S. were Roku TVs, making the Roku OS the [No. 1] selling smart TV OS in the U.S.," the company has said.

Investors will be keeping a close eye on these metrics to ensure they continue to improve.

A word of caution

Many investors are incapable of looking beyond current results. Roku stock sports a sky-high valuation, as shareholders are expecting the pace of growth to continue. The stock currently trades at a trailing-12-month price-to-sales ratio of 14 and an only slightly better forward valuation of 11. Many investors feel a reasonable price-to-sales ratio in general is between 1 and 2.

I think Roku is making all the right moves to capture as much market share as possible during the ongoing transition to streaming. But not all investors have a long-term outlook and if any of Roku's growth metrics fail to live up to the market's preconceived notions of success, the stock could be in for a beating.

Roku still has a long runway for growth, but investors should be prepared for a bumpy ride along the way.