Roku Inc's (ROKU) stock price surged by 5.05% on Monday, fueled by investor optimism surrounding the company's strong performance and growth prospects in the rapidly expanding streaming industry.

The rally was driven by several key factors, including the steady growth of Roku's platform, its improving financial stability, and an attractive valuation that has enticed investors seeking long-term growth opportunities.

According to the company's latest earnings report, Roku's active user base grew by 13% year-over-year, reaching nearly 86 million households. Additionally, streaming hours on the platform increased by a remarkable 20% to 32 billion hours, reflecting Roku's growing dominance in the streaming market.

One of the critical drivers of Roku's success has been its ability to generate positive and rapidly growing free cash flow. In the first three quarters of 2024, the company reported a substantial $902 million in free cash flow, a significant increase from the $157 million reported during the same period in 2023. This strong cash flow generation underscores Roku's improving financial stability and ability to fund future growth initiatives.

Furthermore, Roku's valuation has become increasingly attractive to investors. With a price-to-sales ratio of 2.4, the stock is trading at a discount compared to the broader market, making it an appealing investment opportunity for those seeking exposure to the burgeoning streaming industry.