Roku shares set 1-year high, notch biggest percentage gain since 2017
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By Caroline Valetkevitch
NEW YORK (Reuters) -Shares of video streaming company Roku (NASDAQ:ROKU) Inc closed Friday at their highest level in a little more than a year after it gave an upbeat quarterly revenue forecast.
Roku's stock, which rose 31.4% to $89.61 in its biggest daily percentage gain since November 2017, has more than doubled this year. The day's move added about $3 billion in market capitalization, bringing it to about $12.6 billion, per Refinitiv data.
The company late Thursday also posted stronger-than-expected results for the quarter ended in June.
Roku's strong guidance, beating consensus estimates on a pickup in digital ad sales, followed upbeat forecasts from Meta Platforms and results from Alphabet (NASDAQ:GOOGL) earlier this week, as both companies also reported improved ad sales in the recent quarter.
Meta shares rose 4.4% on Friday while Alphabet increased 2.5%, helping to drive a 1% gain in the S&P 500 index.
Several brokerages raised their price targets on Roku after the news, including D.A. Davidson, which increased its price target to $81 and reiterated its «buy» rating on the stock.
«The company remains confident in its ability to exploit the secular shift of linear TV advertising dollars moving to over-the-top (OTT). With that said, management expects the current challenging ad trends to continue for,» the second half of the year, D.A. Davidson analysts wrote in a note Friday.
Roku said it added 1.9 million «active accounts» from the previous quarter to now reach 73.5 million.
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