Why ROKU Stock Is Rallying Today

Roku (ROKU) stock is jumping 15% after the company reported higher-than-expected fourth-quarter revenue and a lower-than-expected Q4 loss. Additionally, the company’s streaming hours surged 18% versus the same period a year earlier.

A Look at Roku’s Q4 Results

The firm’s Q4 revenue jumped 22% compared with Q4 of 2023 to a record $1.2 billion, versus analysts’ average estimate of $1.15 billion. It generated a per-share loss of 24 cents, much better than the mean outlook of a loss per share of 43 cents. And importantly, its EBITDA, excluding certain items, jumped 62% versus the same period a year earlier to $77.5 million.

A large movie theatre filled with people enjoying a film streaming on a smart TV.

Turning to user metrics, the number of households streaming its platform climbed 12% year-over-year to 89.8 million, while the number of hours spent streaming its platform soared 18% YOY to 127.1 billion hours. Moreover, the streaming hours on The Roku Channel, the company’s own streaming channel, soared 82% YOY.

Roku’s Comments

“We ….continue to expand our penetration in the U.S., which has surpassed half of broadband households,” the company stated in its Q4 Investor Letter.  “We continue to make progress growing ad demand through deeper third-party platform integrations, improving (users’ experience) to expand monetization, and growing Roku-billed subscriptions,” Roku added.

The company predicted that its operating income would be positive in 2026.

While we acknowledge the potential of ROKU, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ROKU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.