Roku’s pre-trading shares are impressing the market as stocks continue to surge as the streaming service raised its full-year outlook and talked about the opportunities that are brought upon by new market entrants like Walt Disney Co. and how the industry is poised into a greater glory in the next few years.
“We are excited, to say the least, about the coming services into [over the top], and believe that we are an essential platform for these new services,” said Scott Rosenberg, the head of Roku’s ROKU, +6.26% platform business, on the company’s conference call Wednesday evening.
Rosenberg cited the evolving and their continuos development of ad products as well as backend machine learning applications that have the capability of analyzing subscriber behavior to create a predicting algorithm.
Roku’s latest numbers and commentary excite the market and drive analysts who see further upside for Roku’s red-hot stock. Shares had climbed 230% on the year as of Wednesday’s close and were up 18% in premarket trading Thursday.
“Roku second-quarter results showed strength in nearly every metric with accelerated revenue growth and robust profitability coming in ahead of guidance and consensus estimates,” Guggenheim’s Michael Morris wrote.
“Roku is the industry-leading streaming video platform, and we maintain our conviction that the company’s growing user base and value proposition for viewers, marketers, content owners, and TV brands will continue to drive economic growth and value creation for shareholders,” he added.
There are high hopes from analysts that Roku could even top its monetization gains as average revenue per user growth accelerated to 26.9%.
“The company also attributed ad growth to expanding first-party customer relationships at scale, which provides precision targeting, premium inventory access, unique sponsorships, and significant reach,” Morris wrote. He rates the stock a buy with a $119 target price.