Roku shares set 1-year high, notch biggest percentage gain since 2017
Reuters
Published Jul 28, 2023 01:09PM ET
Updated Jul 28, 2023 05:56PM ET
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.
(This story has been refiled to add missing word 'than' in paragraph 2)
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