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Roku Rockets Higher on Earnings Beat and Analysts' Praise

Roku surges after reporting better-than-expected first-quarter earnings and boosting its own outlook, sparking positive analyst reviews.

Roku  (ROKU) - Get Roku Inc. Report shares surged on Friday, jumping more than 15%, after the streaming content platform reported better-than-expected first-quarter earnings and provided a positive outlook, prompting a positive response from Wall Street analysts.

San Jose-based Roku on Thursday reported a first-quarter profit of 54 cents a share on revenue that rose 79% year over year to $574.2 million. Analysts were expecting a loss of 13 cents a share on revenue of $491.6 million.

For the second quarter, Roku said it expects net revenue of between $610 million and $620 million vs. analysts' expectations of $550 million.

Better-than-expected advertising revenue helped propel the earnings beat, which in turn had Wall Street analysts sharing their praise for Roku and its future prospects.

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Evercore analyst Shweta Khajuria pointed to Roku’s “clean” earnings beat, which was driven by strength in advertising and content distribution partnerships. She also pointed to strong platform revenue growth, which accelerated for a third consecutive quarter. She kept her outperform rating on the stock and held her price target at $430.

Berenberg analyst David Beckel highlighted Roku’s “strong” first-quarter performance, in particular the company’s revenue beat thanks to stronger-than-expected advertising and content distribution revenue. He kept his buy rating on the stock and held his price target at $439.

Pivotal Research analyst Jeff Wlodarczak called Roku’s results “solid,” though noted the company missed on active account expectations and its valuation remains “very expensive” against what he expects to be a tough short-term backdrop for tech. He cut his price target to $350 from $400 and left his hold recommendation in place.

At last check, shares of Roku were up 15.07% at $327.02. 

Buy or Sell Roku on Earnings? Here's the Chart