Roku (NASDAQ: ROKU) stock has experienced a wild ride since the beginning of the pandemic. Higher-than-normal streaming usage and a fast-growing ad business took the stock to nearly $491 per share at the height of the bull market.

Unfortunately for Roku bulls, the stock would go on to lose nearly all of those gains, and today it still trades about 88% below that high. Nonetheless, the platform's popularity continues to increase, and a recovery in its ad market could not only reverse its decline but send the entertainment stock to new highs.

Roku manufactures and sells a variety of digital media players for video streaming. It also operates an ad-supported video-on-demand service. In the past few years, Roku benefited from a first-mover advantage in North America and a pandemic that left people spending more time inside than usual. This led to front-loaded growth that slowed to a crawl once its users resumed their previous offline activities. Moreover, while it remains the leading streaming platform, it competes with well-resourced tech giants such as Samsung, Alphabet, and Amazon. That could leave it at a considerable disadvantage.

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Source Fool.com