Roku stock rose Thursday after the streaming video platform beat forecasts for the first quarter as it added more viewers than expected.
The San Jose, Calif.-based company late Wednesday said it added 1.6 million new active accounts in the March quarter, bringing its total to 71.6 million. Analysts had expected 1.14 million new users in the period.
Roku lost $1.38 a share on sales of $741 million in the first quarter. Analysts polled by FactSet had expected Roku to lose $1.47 a share on sales of $708 million. In the year-earlier period, Roku lost 19 cents a share on sales of $734 million.
Roku's platform revenue, mostly advertising sales, dipped 1% year over year to $634.6 million in the March quarter. Meanwhile, its device sales rose 18% to $106.4 million. Total revenue increased 1% in the first quarter.
Roku Stock Rises After Report
For the second quarter, Roku predicted revenue of $770 million, up 1%. Analysts had projected sales of $766 million in the June quarter.
On the stock market today, Roku stock edged 0.8% higher to close at 57.01. During the regular session Wednesday, Roku stock fell 2% to close at 56.56.
"We delivered solid first-quarter results in a challenging macro environment," Chief Executive Anthony Wood and Chief Financial Officer Steve Louden said in a letter to shareholders.
They added, "We expect macro uncertainties to persist throughout 2023. Consumers remain pressured by inflation and recessionary fears, and thus discretionary spend is likely to remain muted."
Path To Profitability Questioned
KeyBanc Capital Markets analyst Justin Patterson reiterated his sector weight, or neutral, rating on Roku stock on Thursday.
"We still believe the bar to achieve meaningful EBITDA (earnings before interest, taxes, depreciation and amortization) profitability in 2024 is high," Patterson said in a note to clients.
Roku Stock Has Poor Composite Rating
Last week, streaming video network Netflix missed Wall Street's target for new subscribers in the first quarter and offered a weak outlook. Netflix stock fell on the news.
Netflix stock ranks first out of 21 stocks in IBD's Leisure-Movies & Related industry group. Meanwhile, Roku stock ranks ninth in the group with a poor IBD Composite Rating of 21 out of 99, according to IBD Stock Checkup.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
