Roku's Monthly Active Users Have Risen 243% In 3 Years, But Can The Stock Keep Its Momentum?

Roku Inc ROKU shares rocketed more than 60 percent in their inaugural trading day, inciting some traders to wonder if this would herald the return of the high flying IPO market. Shares closed at $23.50 after the IPO was priced at $14.

Other market commentators were left stupefied by what exactly investors see in the company, a platform that enables users to stream content directly to their televisions. After all, more and more of the third party providers Roku has been dependent on, like Netflix, Inc NFLX, have inked partnerships with cable companies like Wide Open West, Inc WOW to incorporate access to their content right into their cable boxes.

Add that to intense competition from Amazon.com, Inc AMZN’s Fire TV Stick and Alphabet Inc GOOGL’s Chromecast, and it’s easy to see why some wonder how the $2 billion company will hold its own amongst such heavyweights.

Standing Its Ground

But according to recent data, that’s precisely what Roku’s done. Statista reported earlier in September that Roku’s household penetration in the U.S. is nearly three times that of some competitors like Apple Inc AAPL’s Apple TV and 2 percent higher than Amazon’s streaming stick.

When measured by total number of hours streamed, Statista reports that Roku’s monthly active users, or MAUs, have grown by 243 percent since 2014, and 42 percent year-over-year in the second quarter. Compare that to a company like Twitter TWTR, which actually saw its MAUs decline in Q2.

IPOs Have Been Hit And Miss

Beware the allure of the IPO’s price action. Recent IPOs from other tech companies have seen, shall we say, meager staying power.

Much fanfare accompanied the IPO of Snapchat parent company Snap Inc SNAP, when the IPO was priced at $17 but the stock opened at $24. In the second day of trading, Snap shares hit a high of $29.44, but now rest at nearly half that. The stock has struggled to stay above $15 ever since mid-summer.

Roku shares were up 26 percent just after the bell Friday at $29.60.

Related Links:

Roku On Wall Street: Did The Stock Fare Better Than Other Recent IPOs?

Roku IPO Watch: Things To Know