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If You Put $1,000 Into Roku Stock Last January, Here's How Much You'd Have Now

By James Brumley - Dec 10, 2020 at 6:06PM

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This streaming video company offered consumers much-needed entertainment options while waiting for COVID-19 to run its course.

It's been a surprisingly good year for some stocks, despite the pandemic. But it's been a great year for shares of streaming video platform name Roku ( ROKU -2.24% ).

Like all other stocks, this one was pressured lower in February and March after the coronavirus made landfall in the U.S. From peak to trough, Roku tumbled more than 60%. The stock's 450% rally from its March bottom, however, ultimately led to a gain of 137% for the year. A $1,000 investment made in Roku on the first trading day of this year would now be worth a whopping $2,367.

Businessman plotting a rising digital stock chart.

Image source: Getty Images.

Stay-at-home efforts meant to curb the coronavirus turned out to be a boon for Roku. Consumers used that time watching a lot of television, relying on new streaming receivers to do so. Through the third quarter ending in September, year-to-date revenue of $1.13 billion was up 57% year over year. Revenue from sales of devices was higher by 40%, but the company has decidedly mastered the monetization of existing Roku receiver owners. Platform revenue was higher to the tune of 65% through the first three quarters of the year.

Although it's one of 2020's hottest stocks, analysts believe it's become overextended. It's now trading near $322 per share, well above the consensus price target of just above $253.

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.

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