Why Roku Stock Is Soaring Today

Shares of Roku (NASDAQ: ROKU) soared on Friday following a strong earnings report. The media-streaming technology expert's stock rose as much as 20.9% in the morning session before settling back at a still-impressive 14% gain by 1:35 p.m. ET.

Roku's Q4 2024 by the numbers

Your average Wall Street analyst expected Roku's fourth quarter to show a net loss of $0.42 per share on approximately $1.15 billion in sales. The reported loss was a much smaller $0.24 per share, and revenues came in hot at $1.20 billion.

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Roku's customer metrics were also robust. In the fourth quarter, the company added 4.3 million net new streaming households, a 5% sequential increase. Streaming hours rose by 10%, and Average revenue per user (ARPU) ticked 4% higher than the year-ago period.

Roku's path to profitable growth

Advertising was one of the fastest-growing operations in the holiday period, led by political, auto, and retail advertising. Management expects negative operating income in 2025, followed by positive figures starting in 2026. The arguments that drove the stock lower in recent years are melting away.

The stock reached a fresh 52-week high today but still has a long way to go before challenging the lofty heights seen in 2023 and earlier. In other words, today's price jump was a good start, and Roku's stock should have plenty of room to grow from here. It's not too late to start a position in this evolving digital media titan.

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Anders Bylund has positions in Roku. The Motley Fool has positions in and recommends Roku. The Motley Fool has a disclosure policy.