When it comes to hyper-growth streaming device maker Roku (NASDAQ:ROKU), you can’t just write off competitive threats. But, considering how Roku has continued to grow at robust rate despite rising competition, it does look like such competitive threats are overstated. At least for now.

Roku reported yet another double-beat-and-raise quarter recently. Those strong results pushed ROKU stock 20% higher — to all-time highs of just below $60.

As of this writing, ROKU stock had fallen about 4% to $50. But for what its worth, this was a sub-$20 stock in November of 2017.

Clearly, the narrative surrounding ROKU stock has dramatically changed course, and rightly so. At first glance, this looked like another consumer technology hardware company without a moat and going up against some big competitors. But, the company has since built out a platform ecosystem as a moat and is continuing to blow away Google (NASDAQ:GOOG), Amazon (NASDAQ:AMZN), and others in the over-the-top streaming device market. Thus, the narrative has flipped from “competitors will kill Roku” to “Roku is killing competitors”.

That is why ROKU stock rallied from $20 to $60.

Can the rally continue? In the near-term, yes. Longer-term, I still think competition will weigh on this stock.

Here’s a deeper look.

Roku Stock Has Runway in the Near-Term

Roku’s second-quarter numbers were really good. Across the board, growth remained robust, and the implication was that Roku continues to dominate competitors in the over-the-top streaming market.

The number of active accounts on Roku rose 46% year-over-year to 22 million. That 46% growth rate is roughly in-line with what we’ve seen over the past several quarters, so there aren’t any signs that the user base is nearing saturation or being adversely impacted by competition.

Meanwhile, streaming hours rose 57% year-over-year, a rate that is also in-line with historical standards and outpaces user growth. Thus, not only is Roku adding more customers, but those customers are also consuming more content through Roku than ever before.

Average revenue per user shot up 48%, also in line with historical standards. Continued robust growth shows that not only is demand high on the consumer side, but that it is also high on the advertiser side, too.

Side note: player revenue jumped 24% higher in the quarter after several quarters in a row of negative growth. Player gross margins also soared to above 20%. In other words, the player business, which was supposed to be a side show that simply propelled platform growth, is actually starting to make a comeback.

All together, the numbers were really good. In fact, they were so good that investors can largely write off competitive threats for now. Roku is killing Google, Amazon and others in this space. If this dominance continues, I maintain that this company is worth around $60 today, based on the company maintaining majority market share of the rapidly growing OTT device market.

Big growth stocks tend to trade a premium to fair value, so I think it is likely we see prices for ROKU stock in the mid-to-high $60’s this year.

Beware Of Long-Term Risks

Despite my near-term bullishness on the stock, I also think that in the long-run, this stock will have trouble making huge gains.

Why? Competition.

Right now, Roku is killing competitors. But, eventually, that will change. The smart home markets and streaming device markets will converge at one point because there are huge synergies that could exist between the two markets. Amazon and Google have huge and growing footprints in smart home tech. Roku does not.

Thus, if and when these two markets converge, Roku could be left at the mercy of Amazon and Google. Granted, there is the argument that Amazon and Google will let Roku dominate streaming, and simply create other smart home technology that complements Roku. But, it is hard to imagine a domineering company like Amazon doing that.

Instead, what will likely happen is that Amazon and Google develop robust smart home tech which will fully supports their own streaming devices, but isn’t as compatible with Roku players. In that world, Roku could lose significant market share.

Bottom Line on ROKU Stock

Near-term, ROKU stock will head higher because the company is dominating a space oozing with mega-growth potential.

Longer-term, I still think the big tech giants will leverage their vast portfolio of smart home tech to steal market share. Thus, I remain cautious on ROKU stock in a 3 to 5 year window.

As of this writing, Luke Lango was long GOOG and AMZN.