By Angela Palumbo

Roku stock was soaring Friday after positive financial results gave Wall Street confidence in yet another streaming company's future.

Roku reported a narrower fourth-quarter loss and better revenue than analysts expected after the stock market closed on Thursday.

"We were very pleased with the Q4 results. It was an outstanding quarter, " Chief Executive Anthony Wood said on the earnings call.

Shares of Roku were up 13% Friday to $98.40 and were on pace for their largest percentage increase since Nov. 2, 2023, according to Dow Jones Market Data.

Roku sells devices that give customers the ability to access streaming apps on their televisions. Roku's strong fourth-quarter performance comes after some of those streaming companies reported their own solid financials, including Disney+ and Netflix.

Walt Disney reported a first-ever December-quarter profit for its direct-to-consumer segment, which includes the streaming services Disney+ and Hulu, on Feb. 5. Then Netflix said on Jan. 21 that it gained 18.9 million paid subscriptions during the December quarter, which was much higher than Wall Street's estimate of about 10 million. That was Netflix's biggest quarter of net adds in its history.

"Likely benefiting from NFLX's huge 4Q subscriber result, ROKU reported solid 4Q net new active accounts ahead of our +3.5M forecast and 4Q financial results that were also nicely better than expected," Pivotal Research Group analyst Jeffrey Wlodarczak wrote in a note on Friday. Essentially, more people getting Netflix means that more people need to be able to stream Netflix shows. Getting a Roku device is one way to do that.

Wlodarczak upgraded shares of Roku to Buy from Hold and increased his price target on the stock to $125 from $65.

Strength in advertising also helped push up product revenue in the quarter. Wood said on the conference call that it was an "outstanding advertising quarter as well. Even ex-political, it was a strong advertising quarter."

Needham analyst Laura Martin increased her price target on Roku to $120 from $100 on Friday while maintaining a Buy rating on the stock.

"Roku devices are now in >50% of US broadband homes, making Roku the largest streaming distribution platform for films and TV content. Its large scale makes it attractive for US TV advertisers that have 'consumer reach' (top of funnel) goals," Martin said.

Write to Angela Palumbo at angela.palumbo@dowjones.com

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(END) Dow Jones Newswires

February 14, 2025 12:32 ET (17:32 GMT)

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