What happened
In contrast to a great many stocks throughout the exchanges on Thursday, Roku (ROKU 5.41%) ended the day in positive territory, rising in price by 0.4%. There was no market-moving news generated by the company itself. Rather, a peer's success helped juice interest in the entertainment hardware and software maker.
So what
That peer was Walt Disney (DIS 1.54%), a prominent partner of Roku, thanks to the presence of its streaming channels on the latter's provider-neutral smart-TV operating system. After market hours Wednesday, Disney published its Q1 results, posting fundamentals that blew well past analyst estimates.
Image source: Getty Images.
Instrumental in this beat was the continued success of Disney+, the entertainment-giant's main streaming service. During the quarter, "The Mouse" managed to add nearly 12 million subscribers -- again, well above Wall Street's projections.
What's good for Disney+ is good for Roku. While we don't have figures for how many of those new additions are streaming Disney content through Roku's operating system, we can bet that the number is considerable. And any additions widen Roku's user base, providing the company with an excellent chance to draw revenue from them.
Now what
Yet streaming partners like Disney aren't the only drivers of Roku's growth. This is likely one reason why the latter stock only enjoyed an uptick in price on Thursday, in contrast to the relative surge of Disney. Meanwhile, Roku is contending with the current supply shortage of tech components, and we're currently emerging (hopefully) from a pandemic that largely kept us indoors with our TVs for the past two years.
The immediate future of Roku's stock will depend more on how the company is coping with these challenges. This should be apparent in its upcoming Q4 earnings release, slated for publication next Thursday, Feb. 17.
