Roku Shares Jump 8% After Q4 Results Show Strong Subscriber Growth

The streaming device maker offered an upbeat forecast for the current quarter; analysts responded with upgrades, price target hikes

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Roku / TIFF

Shares of Roku Inc. shot up 8% as the market opened Thursday, after the streaming device maker posted a smaller-than-expected fourth-quarter loss and offered a promising forecast for the current period.

The company posted a net loss of $237.2 million, or $1.70 per share, on revenue of $867.1 million. Wall Street had forecast a loss of $1.74 per share on revenue of $803.2 million. The company’s revenue forecast of $700 million in the first quarter came in nearly $10 million above Wall Street’s view.

Roku added 10 million net new active accounts during the quarter, bringing its total to 70 million globally, as average revenue per user for the quarter clicked up 2% year over year to $41.68. Total streaming hours leaped 23% during the quarter. Notably, ad sales increased, bucking broader industry trends and helping to lift results.

The Roku Channel grew engagement over 85% year over year in the fourth quarter, reaching U.S. households with an estimated 100 people.

Roku shares added $5.38, or 8.5%, to $68.87 in morning trading. The stock, which was trading as high as $467 two years ago but sank below $40 in December, ended Wednesday up nearly 57% since the start of the year.

Analysts responded to the results and positive forecast with upgrades and price target increases.

Needham analyst Laura Martin raised the firm’s price target on Roku to $80 from $65, implying that she expects the stock to rise another 26% by the end of the year. She kept a “Buy” rating on the shares, , according to, telling investors in a note that the stock is a “pure-play” way to invest in growth of the U.S. over-the-top and connected-TV ecosystems.

Wedbush analyst Michael Pachter also hiked his price target on Roku to $80, and kept an “Outperform,” or “Buy” rating on the shares. He pointed to the growth by over five million accounts in the quarter despite the difficult macroeconomic environment and the first-quarter revenue guidance as positives, the posted.

Oppenheimer analyst Jason Helfstein put an even higher price target of $85 on the stock with an “Outperform” rating. Helfstein expects the company to focus on direct integrations with larger digital service providers, enabling it to focus on the preferences of their largest advertisers, “who want integrated CTV & retail media network campaigns.”

Loop Capital analyst Alan Gould, who upped his price target to $75 with a “Buy” rating, said that while the macro advertising environment is still challenging, Roku has exceeded its revenue guidance for the past two quarters.