What Happened?
Shares of streaming TV platform Roku (NASDAQ: ROKU) jumped 3.6% in the afternoon session after the company announced the U.S. launch of a new Philips Roku TV featuring Ambilight technology, alongside positive commentary from a Wall Street analyst. The new line of TVs, available for the first time in the U.S. with the Roku operating system, incorporates Philips' exclusive Ambilight feature. This technology uses intelligent LEDs built into the back of the TV to project colors onto the wall that match the on-screen action in real-time, creating a more immersive viewing experience. The televisions will be sold at Sam's Club locations across the United States. Adding to the positive sentiment, Needham analyst Laura Martin reiterated a 'Buy' rating on Roku's stock, maintaining a $110 price target. Martin's confidence is based on the company's ability to meet viewer demands for more personalized content and advertising experiences.
After the initial pop the shares cooled down to $103.98, up 3.9% from previous close.
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What Is The Market Telling Us
Roku’s shares are very volatile and have had 28 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 8 days ago when the stock gained 1.4% on the news that the company announced the addition of ten new free channels to The Roku Channel, its free streaming service. This expansion brought the platform's total lineup to over 570 channels available to its more than 145 million active accounts. The move came as many viewers sought no-cost entertainment options amid rising subscription costs for other services.
Roku is up 39.6% since the beginning of the year, and at $103.98 per share, has set a new 52-week high. Investors who bought $1,000 worth of Roku’s shares 5 years ago would now be looking at an investment worth $519.06.
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