Even as recently as early 2019, investors could pick up Roku (ROKU -0.81%) stock for as little as $30 per share. That changed after an epic run in 2019 sent the stock to dizzying heights, gaining 337%. The soaring stock price also sent the company's valuation into the stratosphere, but investors have high hopes that the streaming pioneer will continue to gain converts when Roku releases the results of its fourth quarter after the market close on Thursday, Feb. 13.

Many believe this could be just the beginning for Roku, and impressive financial results will push the stock even higher. Let's take a look at three areas that will help Roku maintain its upward trajectory.

A Hisense TV featuring the Roku operating system showing streaming channel options.

Image source: Roku.

Continued platform strength

While Roku is best known for its namesake devices that make streaming video a snap, many fail to understand the power of the company's platform business, which includes advertising, The Roku Channel, and its smart-TV operating system (OS). This trifecta of opportunities grew 79% year over year in the third quarter, after increasing 79% and 86% in the first and second quarters, respectively. The platform segment made up 67% of Roku's total revenue through the first three quarters of 2019.

The potential for continued platform growth is still vast as advertisers continue to migrate from traditional broadcast and cable television to streaming. Roku increasingly dominates the streaming device market in the U.S., as its OS can be found in one of every three smart TVs sold in the country. Roku's recent acquisition of demand-side advertising platform DataXu will further boost the company's advertising business.

Impressive user growth

The reason Roku has been able to continually attract advertisers is the growing body of active users that regularly visit its platform. In the third quarter, active accounts grew 36% year over year, barely budging from the 40% and 39% growth in the two prior quarters. User growth could potentially accelerate in the fourth quarter, which has historically been strong as the result of holiday-gifting of Roku devices.

It isn't just the number of users that makes Roku attractive but the high level of engagement. Streaming hours, which make an excellent proxy for user engagement, grew 68% year over year in the third quarter, climbing to 10.3 billion hours of streaming. The fact that viewing hours are growing faster than account additions shows that existing users are watching more content on the platform.

Strong adjusted profits

Roku has long opted to favor rapid growth rather than focus on profits, yet the company has managed to stay fairly close to breakeven. Roku's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was a loss of $0.4 million in the third quarter, even though the company had predicted an adjusted loss of between $5 million and $11 million. 

For the fourth quarter, Roku is guiding for adjusted EBITDA in a range of $7 million to $12 million, but management has been historically conservative regarding its guidance. Investors shouldn't be surprised if the company's results come in much better than expected.

It's important to note that given the stock's incredible run in 2019, Roku has a frothy valuation with a price-to-sales ratio of 16, much higher than the one to two that most investors consider a good value. This illustrates just how much growth investors have baked into Roku's current stock price. If the company fails to deliver on Wall Street's lofty expectations, the stock could come crashing down.

With a high-flyer like Roku, however, it's more important to focus on the massive long-term opportunity and less on near-term stock price moves.