By Caroline Valetkevitch
NEW YORK (Reuters) – Shares of video streaming company Roku Inc jumped about 25% on Friday and were on track for their biggest daily percentage gain since May 2019 after the streaming device maker gave an upbeat quarterly revenue forecast.
Roku’s stock was last up 25.1% at $85.31 in midday trading and has more than doubled so far this year.
The company late Thursday also posted stronger-than-expected results for the quarter ended June in.
Roku’s strong guidance, beating consensus estimates on a pickup in digital ad sales, followed upbeat forecasts from Meta Platforms and results from Alphabet earlier this week, as both companies also reported improved ad sales in the recent quarter.
Meta shares were up about 4% on Friday while Alphabet was up about 3%, helping to drive a roughly 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.
(Reporting by Caroline Valetkevitch; Editing by Lance Tupper and Susan Heavey)
