Roku Stock Soars on Strong Forecast. Wall Steet Is Upbeat.

Roku sells video-streaming hardware and licenses its operating system to TV makers. (Dreamstime)

Key Points

• Roku reported third-quarter revenue of $1.21 billion, in line with forecasts. Adjusted earnings per share were 16 cents, exceeding analysts’ expectations.
• Roku projects fourth-quarter revenue of $1.35 billion, surpassing the consensus estimate of $1.32 billion.
• Roku’s stock increased by 11% to $111.20 on Friday, and is up 50% year to date, outperforming the Nasdaq Composite.

Roku stock has taken off after the company reported September quarter earnings that soundly exceeded expectations.

On Thursday, Roku reported third-quarter revenue of $1.21 billion, in line with the consensus estimate of $1.21 billion among analysts tracked by FactSet. The company had 16 cents in adjusted earnings per share, above the average call for nine cents among analysts.

Guidance was solid. For the fourth quarter, Roku forecasts revenue of $1.35 billion versus the consensus call for $1.32 billion.

“Looking ahead, we remain confident in our strategy and our long-term growth,” CEO Anthony Wood said in the earnings shareholder letter. “We see significant opportunity to drive double-digit growth in [Roku] Platform revenue in 2026.”

Roku shares were up 11% to $111.20 on Friday.

The company sells video-streaming hardware and licenses its operating system to TV makers. Consumers use Roku to watch content streamed over the internet.

On Friday, Benchmark analyst Daniel Kurnos reiterated a Buy rating for Roku stock and reaffirmed his $130 price target.

“Roku looks and sounds really good right now,” he wrote. “We think this is a name you want to own, especially into next year.”

Roku stock is up 50% so far this year, outperforming the 23% rise for the Nasdaq Composite.

Write to Tae Kim at tae.kim@barrons.com