Streaming specialist Roku (NASDAQ: ROKU) has been flying high lately due to some encouraging quarterly results it posted this month. The ad business is looking stronger, and investors are bullish on the company's prospects. But there is one thing that investors should keep an eye out for, and it's something that could derail the stock's progress.

A problem with Roku's business is that while it grows, not all metrics are moving in the right direction. The company recently posted its latest earnings results, which showed year-over-year revenue growth of 20%, with its top line reaching $912 million for the period ending Sept. 30.

But when you look further down at the gross profit, that only increased by 3%. And the actual gross margin percentage was 40.4%, which is far less than the 46.9% it reported in the year-ago period. Gross margin is important because it indicates how much a company has left over after cost of revenue to apply toward overhead and operating expenses. If it deteriorates, then that can offset any big increase in revenue.

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Source Fool.com