Shares of Roku (ROKU -0.34%) were up 6.7% as of 12:28 p.m. ET on Monday. The company confirmed that it had extended its multi-year distribution agreement with Amazon -- a top competitor in the TV operating system market.
Roku's stock price has been hammered over the last year. Not only has revenue growth slowed over the last few quarters, but some investors have grown impatient with the company's low profitability. At its high in 2021, the stock traded at a price-to-sales ratio of 30. After a sharp slide in the share price over the last year, the stock currently trades at 6.9 times sales.
The lower valuation could be an opportunity for value investors to score a bargain on a company that is not done growing in the streaming market. Any positive news at this point is likely going to push the stock higher, as bargain hunters look for signposts that Roku's business is still strong and positioned for long-term growth.
Roku has been punished by the market for its lack of near-term profitability, but investors should love the company's large growth opportunity to capture additional market share in a growing streaming market. With 60 million active accounts, there are still a lot of televisions around the world without Roku.
Roku is the No. 1 streaming platform in the U.S., Mexico, and Canada. The market might be underestimating Roku's lucrative position with a growing number of active accounts, along with advertisers that need to get their brands in front of a growing streaming audience.