Roku Inc. stock had its best day in 14 months Monday after saying the number of active accounts in the fourth quarter rose 40% from the year-earlier quarter, giving investors confidence that viewers are doubling down on streaming platforms.
People are embracing streaming as their preferred method for consuming television entertainment, and Roku — which makes streaming boxes, sticks and software — touted the preliminary numbers ahead of a busy week at the 2019 CES consumer electronics trade show in Las Vegas. It said users of its platform streamed more than 7.3 billion hours of content in the last quarter, a 68% surge over the same quarter a year earlier. Annual streaming hours rose more than 60% compared with 2017, to 24 billion hours.
The Los Gatos, Calif., company’s shares soared 25% on Monday to $42.18, their biggest jump since Nov. 13, 2017. Roku went public in September of that year.
Although Roku remains a volatile stock, Bloomberg Intelligence analyst Sean Handrahan said the account growth “is a big positive surprise and I really think they’re starting to get leverage on smaller content players.”
Roku also announced a deal Monday with Westinghouse Electronics to offer its platform right out of the box and add new TV models offering its service within the first half of the year, a move aimed at extending Roku’s reign as one of television streaming’s leaders. “Account scale is key to attracting content providers and advertisers, aiding long-term growth prospects,” Handrahan wrote.