Roku stock has been on a tear
Streaming device maker Roku (ROKU) has been on a tear this year. The stock soared 8.7% on June 5 to reach another all-time high. The stock ended the day at $101.7. ROKU is now up a whopping 237% year-to-date.
Roku’s recent growth has been driven by its ad business, which is growing much faster than its traditional streaming device business and now makes up 64.9% of its overall revenue.
The company’s platform business, which includes its ad business, is also much more profitable than its player businesses. The former had a gross margin of 69.9% in the first quarter compared to the latter’s 9.8%.
Roku stock surged nearly 9% after an upgrade from Guggenheimer
The most recent jump in Roku stock came after Guggenheim expressed optimism about the stock and upgraded it from a “neutral” to a “buy.”
Guggenheim’s Michael Morris said in a note to investors, “Roku is one of the only pure-play streaming video companies and is uniquely well positioned to benefit from the continued audience shift to digital video consumption.”
Guggenheim also said that Roku generated $0.04 per hour in ad revenue during the first quarter compared to $0.19 per hour generated by traditional TV.
The company is on track to reach its goal of generating $1 billion in revenue this year.