What happened

Shares of Roku (NASDAQ:ROKU) gained 44.7% in October 2019, according to data from S&P Global Market Intelligence. It's hard to pin the gain on a single event because Roku kept up a steady barrage of market-moving news throughout the month.

So what

The maker of hardware devices and software platforms that deliver streaming media into your living room entered October on the heels of a 33% plunge in September that was driven by worries about increasing competition. That set the stage for several Wall Street analysts reaching the conclusion that Roku was a buy at those sharply discounted prices. At the same time, Roku added more advertising space to screens running its content delivery portal, which will throw more fuel on its roaring revenue-growth fires.

A couple of weeks later, Roku announced the acquisition of ad campaign management specialist DataXu in a potentially game-changing deal with a modest $150 million price tag.

All of these events pushed Roku's shares just a little bit higher. By the end of October, the stock was trading just 17% below its annual highs from early September.

Close-up shot of a hand holding a TV remote in front of a wall made up of 120 TV screens, all showing different content.

Image source: Getty Images.

Now what

Roku eased into November on an impressive third-quarter earnings report, beating analyst estimates across the board while boosting top-line revenue by 50% year over year. The stock still fell as much as 17.6% the day after the report as analysts had expected to be even more wrong. A Morgan Stanley analyst explained that Roku's nosebleed valuations only work if the company can keep delivering "continued upside surprises."

Such is the weird, wacky world of investing in high-growth stocks -- the surprises aren't always big enough. But don't cry for Roku's investors. The stock has still doubled over the last 52 weeks and quadrupled year-to-date, and I would argue that Roku's best days still lie far ahead.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.