Despite second- and third-quarter financial results that weren't immediately well-received by the investment community, Roku (NASDAQ: ROKU) shares have been on the way up in recent months, rising 52% since early August. That gain is better than the broader market indices.

However, as of Dec. 18, this growth stock was still trading 84% off its all-time high, a record that was set in July 2021. Does the dip mean you should buy Roku while it's below $90 per share, a level the shares were last at in February?

Roku offers a smart-TV operating system that allows viewers to aggregate all of their various streaming services into a single user interface. The company has been doing this since 2008. Its lead in this industry has resulted in top market share in the U.S., as well as in Canada and Mexico.

Because the TV is vital to how households view video entertainment, this puts Roku in an advantageous position. In the third quarter, the company revealed that 32 billion hours of content were streamed on the Roku platform, up 20% year over year.

Another bull case centers on Roku's improving financial picture. Roku reported a $531 million and $792 million operating loss, respectively, in 2022 and 2023. But management has been focused on cutting costs. The operating loss shrank drastically from $350 million in Q3 2023 to $36 million last quarter, thanks to much lower research and development and sales and marketing costs.

Owning unprofitable companies is always a risk, because it demonstrates that the business model isn't sustainable yet. What's more, it puts Roku in a tough position if it has to raise capital at inopportune times. But it's worth pointing out that Roku's balance sheet looks clean. As of Sept. 30, the company had $2.1 billion in cash and cash equivalents with zero debt.

Investors might also consider buying this stock because Roku operates in two large and growing end markets, namely streaming entertainment and digital advertising. Every year, more households in the U.S. and worldwide decide to cancel their cable-TV subscriptions. And as engagement on these streaming platforms grows, advertising dollars are set to follow.

Of course, no matter how compelling the bull case is, investors always need to be mindful of risks that are present. Roku might have a dominant position among streaming platforms. But competition is incredibly fierce.