What happened
Shares of Roku (ROKU +1.61%) spiked nearly 10% higher on Friday as of 1:50 p.m. EDT. There was no specific news from the leading TV streaming company, but July 23 marks the opening ceremonies of the Olympics in Tokyo, Japan. Roku had previously announced a partnership with NBCUniversal (a subsidiary of Comcast (CMCSA 0.47%)) to bring the summer games directly to the home screen of the Roku channel, so user engagement on Roku's services could see a spike in the coming weeks.
It's also stock options expiration day, and interest in investing in Roku is flying high right now. In fact, one Wall Street analyst from researcher Stephens mentioned Roku in a recent research note about The Trade Desk (TTD 3.06%) as benefiting from a continued transition to streaming-based advertising. This at least partially explains traders' bullish outlook on the stock.
Image source: Getty Images.
So what
After a sharp sell-off in the spring along with other high-growth technology stocks, Roku is back on a tear and close to all-time highs again. The stock is up 38% so far in 2021, and up more than 240% since the start of 2020.
There's good reason for this. Roku has emerged as one of the preeminent TV streaming platforms, and even as effects of the pandemic ease, Roku's user base (which stood at 53.6 million active accounts as of March 31) is showing no signs of migrating to other entertainment venues. Streaming hours on Roku were up 49% year over year in the first quarter, reflecting not just the new active accounts it has picked up but also more time spent on Roku from existing users as well.
Now what
Roku will release its second-quarter 2021 earnings update on Wednesday, Aug. 4. This will be the first full quarter in which pandemic-era financial results are lapped from a year ago. Worry had mounted earlier in the year that Roku's growth would tap the brakes as it started to lap results from the initial lockdowns a year ago (when everyone was stuck at home watching TV), but Roku's outlook didn't disappoint. Management is calling for year-over-year revenue growth of 73% to $615 million in Q2.
Given the incredible momentum Roku is riding, it's no surprise shares are on the rise ahead of the next quarterly report.
