One of this year's biggest gainers is Roku (NASDAQ:ROKU). The company delivering a sticky streaming video experience to more than 30 million homes has seen its stock more than quadruple in 2019, as investors gravitate to the narrative of Roku as the ultimate winner in this suddenly competitive climate for streaming services. 

This niche will continue to be a hotbed of growth for consumer discretionary stocks, but the year ahead should prove more challenging now that Roku won't take anyone by surprise. There's plenty to like in Roku, but let's go over some of the things that can trip up this year's hottest large cap. 

ESPN running on a Roku TV operating system.

Image source: Roku.

1. Subscriber growth can slow, and usage can peak

There's no denying that momentum is on the side of Roku's platform. There were 32.3 million active accounts on Roku at the end of September, a juicy 36% increase over the past year. Roku is finding ways into homes through its dirt-cheap dongles and as the provider of the operating system of choice for smart television manufacturers. Growth should continue to be positive for some time, but the pace of its consumer gains should decelerate in the future. 

There's also the concern that the next wave of Roku users won't be hardcore streaming devotees. Today's Roku users are spending an average of 3.4 hours a day streaming through their devices, and that's a lot of time. Committed viewers are great for Roku, since it generates platform revenue through advertising as well as the referral revenue it receives when folks sign up for new services through the hub. If the new breed of Roku users are just casual consumers of streaming content on TVs, it would eat into both its currently growing average revenue per user and the scalability of the model.

2. Someone can build a better or cheaper mousetrap

Roku was a dud through most of 2018, largely because the biggest names in tech and e-commerce were flooding the market with subsidized hardware to get their foot in the door. The heavyweights aren't going away, but Roku has proved in 2019 that it can not only survive but also thrive in this environment. 

Life can still be hard at the top. Even the country's largest cable provider got into this game earlier this year, and with so many companies willing to take a loss in gunning for Roku's captive audience, it wouldn't be a surprise if one or more its rivals take a stronger stance in either pushing their operating systems or marking down their hardware. Investors will need to keep an eye on sequential gains here to make sure Roku isn't relinquishing market share. 

3. Consolidation of streaming services can bite Roku

The biggest appeal in Roku as an investment is the agnostic ways of its its platform. Roku will be a winner no matter which streaming services take the lead. If anything, Roku is at its best when leadership among the premium streaming services is challenged, as it makes the players more hungry to strike marketing partnerships with Roku to reach its widening audience. 

This is sweater weather for the cool Roku. Two high-profile streaming services launched last month, and we will see Peacock, HBO Now, and others emerge in early 2020. Roku should feast through the next couple of quarters, but there will inevitability be a shakeout. All of these players can't invest as much as they are on head-turning content without dividing audiences, and eventually the weaker hands will fold or get acquired by the more successful players. Roku bulls must hope there's always healthy competition among streaming services looking to stand out on the growing platform, but the playing field will thin out at one point -- and when it does, the smart money may go from buying the basket to betting on the best individual eggs in said basket.