Business Corpus: Roku Stock Surges To Buy Point On Second-Quarter EarningsRoku stock soared on Thursday after the streaming video company delivered a beat-and-raise second-quarter report fueled by advertising growth on its platform. The post Roku Stock Surges To Buy Point On Second-Quarter Earnings appeared first on Investor's Business Daily.

[Collection]

Roku stock soared on Thursday after the streaming video company delivered a beat-and-raise report for the second quarter fueled by advertising growth on its platform.

Roku (ROKU) shares jumped 19%, near 56.40, in morning trading on the stock market today. The stock leapt above a 51.92 handle buy point in a deep cup base. The company went public last September at 14 and hit an all-time high of 58.80 in December.

Late Wednesday, the Los Gatos, Calif.-based company beat Wall Street's estimates for the second quarter and guided higher for revenue and adjusted profit for the full year.

The company broke even on sales of $156.8 million in the June quarter. Analysts expected it to lose 15 cents a share on sales of $141.5 million.

Adds 1.2 Million New Users

Active accounts rose 46% to 22 million users in the second quarter from the same period last year. It added 1.2 million new users from the first quarter.

Average revenue per user climbed 48% year over year to $16.60 in the June quarter. It was $15.07 in the March quarter.

Roku's streaming video platform is a popular way for TV viewers to access content from such services as Netflix (NFLX), Amazon.com (AMZN), Hulu and Alphabet's (GOOGL) YouTube.

It sells streaming video hardware and licenses a smart-TV operating system to television makers. But advertising on its platform is its fastest-growing business.

Roku Stock Gets Price-Target Hikes

At least three Wall Street analysts raised their price targets on Roku stock after the company's earnings report.

KeyBanc Capital Markets analyst Evan Wingren upped his price target to 67 from 54 and kept his overweight rating.

"Roku has continued to exceed our expectations, which is fundamentally driven by its purpose-built TV operating system and the Roku Channel," its advertiser-supported on-demand streaming channel, Wingren said in a report to clients.

Needham analyst Laura Martin speculates that Roku could be a takeover target. She reiterated her buy rating and price target of 60 in a report Thursday.

No Plans For Original Content On Roku Channel

Roku is ramping up its promotion of free, advertiser-supported content on its platform. It is adding new content categories to the Roku Channel. That includes news and expanding into new geographies, starting with Canada.

Roku has no plans to follow Netflix and others into producing original video content, Chief Financial Officer Steve Louden told Investor's Business Daily.

"We don't have any plans to go into original content," he said. "The way we look at it is there's a lot of great content in content owners' libraries that is increasingly underutilized."

Current offerings on the Roku Channel include movies like "The Matrix" trilogy and "School of Rock" and TV series like "Bewitched" and "I Dream of Jeannie."

The post Roku Stock Surges To Buy Point On Second-Quarter Earnings appeared first on Investor's Business Daily.