Why Roku Stock Is Ripping Higher

Roku Inc ROKU shares are up Thursday following the company's better-than-expected fourth-quarter results. Several analysts are also out with positive coverage on the name in the wake of the report. 

• Q4 Revenue: $867.06 million beat estimate of $809.74 million
• Q4 EPS: $(1.70) beat estimate of $(1.72)

Platform revenue was up 5% year-over-year, while devices revenue dropped 18% year-over-year.

Roku added approximately 4.6 million net new active accounts in the fourth quarter, bringing total global actives up to 70 million. Average revenue per user came in at $41.68 in the fourth quarter, representing 2% growth year-over-year.

"Despite a difficult macro environment in 2022, we made excellent progress building on our platform, brand, and industry leadership," the company said in a letter to shareholders.

"Importantly, we plan to continue to improve our operating expense profile to better manage through the challenging macro environment, while building on our platform's monetization and engagement tools and partnerships," the company added.

Roku expects first-quarter revenue of roughly $700 million, total gross profit of roughly $310 million and adjusted EBITDA of negative $110 million.

Everything You Need To Know: Roku Q4 Earnings Highlights: Revenue, EPS Beat, Active Account Update, Roku Branded TVs, Q1 Guidance And More

Analyst Assessment:

• Atlantic Equities analyst Hamilton Faber upgraded Roku from Underweight to Neutral and announced a $76 price target.
• Needham analyst Laura Martin maintained Roku with a Buy and raised the price target from $65 to $80.
• Pivotal Research analyst Jeffrey Wlodarczak maintained Roku with a Sell and raised the price target from $40 to $55.
• Rosenblatt analyst Barton Crockett maintained Roku with a Neutral and raised the price target from $44 to $76.
• Loop Capital analyst Alan Gould maintained Roku with a Buy and raised the price target from $56 to $75.

ROKU Price Action: Roku has traded between $161.56 and $38.26 over a 52-week period.

The stock was up 7.77% at $68.50 at time of publication, according to Benzinga Pro.

Photo: courtesy of Roku.