Shares of Roku (NASDAQ: ROKU) were up 6.7% as of 12:28 p.m. ET on Monday. The company confirmed that it had extended its multi-year distribution agreement with Amazon -- a top competitor in the TV operating system market.
Roku's stock price has been hammered over the last year. Not only has revenue growth slowed over the last few quarters, but some investors have grown impatient with the company's low profitability. At its high in 2021, the stock traded at a price-to-sales ratio of 30. After a sharp slide in the share price over the last year, the stock currently trades at 6.9 times sales.
The lower valuation could be an opportunity for value investors to score a bargain on a company that is not done growing in the streaming market. Any positive news at this point is likely going to push the stock higher, as bargain hunters look for signposts that Roku's business is still strong and positioned for long-term growth.
Source Fool.com