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Roku
(NASDAQ:ROKU)
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Rating:74Outperform
Price Target:
$154.00
▲(32.54% Upside)
Action:Reiterated
Date:06/19/26
ROKU scores well on improving fundamentals and cash generation, supported by positive technical trend and upbeat guidance on platform growth and margins, with the announced Fox acquisition providing additional support. The overall score is held back primarily by expensive valuation (high P/E) and ongoing device-margin/second-half ad visibility risks.
Positive Factors
Strong free cash flow generation
Consistent, high free cash flow with FCF about 99% of net income provides durable financial flexibility. This funds product investment, marketing, and potential M&A while insulating the business from ad-cycle volatility; sustaining these cash levels underpins long-term strategy execution.
Negative Factors
Device revenue decline and negative device margins
Hardware is a loss-leading, volatile line that can weigh consolidated profitability over time. Declining ASPs and elevated memory costs compress device margins, limiting the ability to subsidize platform growth and increasing reliance on platform economics to deliver company-wide profit.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Consistent, high free cash flow with FCF about 99% of net income provides durable financial flexibility. This funds product investment, marketing, and potential M&A while insulating the business from ad-cycle volatility; sustaining these cash levels underpins long-term strategy execution.
Read all positive factors
Roku Key Performance Indicators (KPIs)
Any
Active Accounts
Measures the number of user accounts actively engaging with Roku's platform, indicating growth in user base and potential for increased ad revenue.
Measures the number of user accounts actively engaging with Roku's platform, indicating growth in user base and potential for increased ad revenue.
Data provided by:
The Fly
The FlyRoku (ROKU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$20.09B
Dividend YieldN/A
Average Volume (3M)4.90M
Price to Earnings (P/E)100.3
Beta (1Y)2.35
Revenue Growth16.78%
EPS GrowthN/A
CountryUS
Employees3,340
SectorCommunication Services
Sector Strength97
IndustryEntertainment
Share Statistics
EPS (TTM)1.36
Shares Outstanding131,950,100
10 Day Avg. Volume10,747,580
30 Day Avg. Volume4,898,332
Financial Highlights & Ratios
PEG Ratio-1.08
Price to Book (P/B)6.01
Price to Sales (P/S)3.37
P/FCF Ratio33.37
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue3.87
Enterprise Value/Gross Profit8.76
Enterprise Value/Ebitda45.74
Forecast
1Y Price Target
$159.35Price Target Upside37.15% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering24
EPS Forecast (FY)2.47
Revenue Forecast (FY)$5.56B
Roku Business Overview & Revenue Model
Company Description
Roku, Inc., alongside its affiliated companies, operates a significant platform for television streaming. The enterprise is segmented into two primary areas: Platform and Player. Through its platform, users can effortlessly explore and access a va...
How the Company Makes Money
Roku generates revenue primarily from its Platform segment and secondarily from its Devices segment. Platform revenue is largely driven by advertising sold on Roku’s properties and across its ecosystem (e.g., video ads and other ad formats served ...
Roku Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and financial trajectory: strong platform, advertising, and subscription revenue growth; meaningful margin expansion in advertising; record-like free cash flow; broad DSP and AI-driven product momentum; and a major scale milestone of 100M streaming households. Offsetting risks include device revenue and margin pressure from falling ASPs and rising memory costs, subscription gross margin mix effects, and second-half visibility risks tied to political ad spending and tougher comparables. On balance, the positive growth, margin improvement in the core platform business, and strong cash generation outweigh the device and mix headwinds.Positive Updates
Strong Platform and Advertising Growth
Platform revenue grew 28% year-over-year; advertising revenue grew 27% year-over-year. Management expects Q2 platform revenue growth of ~20% and raised full-year platform revenue guidance by over $100 million to nearly 21% growth.
Negative Updates
Device Revenue Decline and Margin Pressure
Device revenue down 16% with a negative 14% device margin. Management cited declining ASPs for streaming players and elevated memory costs as primary drivers; higher memory pricing expected in the back half of the year despite being largely factored into guidance.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Platform and Advertising Growth
Platform revenue grew 28% year-over-year; advertising revenue grew 27% year-over-year. Management expects Q2 platform revenue growth of ~20% and raised full-year platform revenue guidance by over $100 million to nearly 21% growth.
Read all positive updates
Company Guidance
Roku guided Q2 platform revenue to about 20% year‑over‑year growth (with advertising and subscriptions each roughly at that pace) and raised full‑year platform revenue guidance by over $100 million (≈3 percentage points) to nearly 21%; management said EBITDA and EBITDA margins are being increased and free cash flow is expected to again exceed adjusted EBITDA for the full year. For context, Q1 included platform revenue +28%, advertising revenue +27%, subscription revenue +30% (23% ex‑Friendly), EBITDA margin nearly 12% (more than doubled YoY), $148 million of free cash flow (~16% FCF margin), ad gross margin just over 60% (up >400 bps YoY), subscription gross margin just north of 40% (expected ~41–42% for the year) and platform gross margin toward the high end of ~51–52%; device investment and unit assumptions (including expected elevated memory costs) remain unchanged from last quarter, and the company has greater visibility into Q2 than the more conservatively modeled back half.Roku Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
74
Positive
Cash Flow
85
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.97B | 4.74B | 4.11B | 3.48B | 3.13B | 2.76B |
| Gross Profit | 2.19B | 2.07B | 1.81B | 1.52B | 1.44B | 1.41B |
| EBITDA | 420.10M | 436.40M | 219.86M | -362.87M | -148.61M | 408.78M |
| Net Income | 201.49M | 88.36M | -129.39M | -709.56M | -498.00M | 242.38M |
Balance Sheet | ||||||
| Total Assets | 4.35B | 4.43B | 4.30B | 4.26B | 4.41B | 4.08B |
| Cash, Cash Equivalents and Short-Term Investments | 2.38B | 2.32B | 2.16B | 2.03B | 1.96B | 2.15B |
| Total Debt | 501.12M | 871.80M | 591.93M | 654.27M | 719.33M | 521.71M |
| Total Liabilities | 1.68B | 1.78B | 1.81B | 1.94B | 1.77B | 1.32B |
| Stockholders Equity | 2.67B | 2.66B | 2.49B | 2.33B | 2.65B | 2.77B |
Cash Flow | ||||||
| Free Cash Flow | 652.71M | 478.44M | 212.98M | 173.24M | -149.90M | 188.04M |
| Operating Cash Flow | 659.20M | 483.72M | 218.04M | 255.86M | 11.79M | 228.08M |
| Investing Cash Flow | -758.17M | -782.37M | -25.06M | -92.62M | -201.70M | -176.82M |
| Financing Cash Flow | -508.83M | -280.10M | -89.20M | -61.24M | 8.36M | 1.00B |
Roku Technical Analysis
Positive
116.19
Price Trends
125.53
Positive
110.00
Positive
105.98
Positive
Market Momentum
3.59
Negative
57.68
Neutral
40.79
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ROKU, the sentiment is Positive. The current price of 116.19 is below the 20-day moving average (MA) of 130.58, below the 50-day MA of 125.53, and above the 200-day MA of 105.98, indicating a bullish trend. The MACD of 3.59 indicates Negative momentum. The RSI at 57.68 is Neutral, neither overbought nor oversold. The STOCH value of 40.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ROKU.
Roku Risk Analysis
Roku disclosed 65 risk factors in its most recent earnings report. Roku reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Roku Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $171.55B | 15.75 | 10.29% | 1.10% | 4.02% | 27.66% | |
75 Outperform | $14.06B | 30.59 | 67.11% | 2.47% | 12.55% | -0.50% | |
74 Outperform | $20.09B | 100.28 | 7.64% | ― | 16.78% | ― | |
72 Outperform | $310.80B | 23.35 | 49.24% | ― | 18.57% | 45.93% | |
70 Outperform | $20.11B | 11.93 | 14.86% | 0.75% | 0.60% | -5.58% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
55 Neutral | $67.04B | -39.32 | -4.94% | ― | -2.78% | 84.26% |
* Communication Services Sector Average
ROKU
Roku
136.53
50.33
58.39%
DIS
Walt Disney
98.63
-24.03
-19.59%
NFLX
Netflix
73.78
-55.58
-42.97%
FOXA
Fox
50.39
-5.05
-9.11%
WMG
Warner Music Group
26.59
-0.72
-2.65%
WBD
Warner Bros
27.13
16.19
147.99%
Roku Corporate Events
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Roku Reorganizes Financial Reporting Into Three New Segments
Positive
Jun 18, 2026
Roku reported that, effective in the first quarter of 2026, it reorganized its internal and external financial reporting into three segments—Advertising, Subscriptions, and Devices—separating what was previously a combined Platform seg...
Executive/Board ChangesShareholder Meetings
Roku Shareholders Back Board, Executive Pay and Auditor
Positive
Jun 17, 2026
On June 11, 2026, Roku, Inc. held its annual meeting of stockholders via live webcast, where investors voted on board elections, executive pay, and auditor ratification. Stockholders elected three Class III directors, Jeffrey Hastings, Neil Hunt, ...
Business Operations and StrategyExecutive/Board ChangesDelistings and Listing ChangesM&A TransactionsPrivate Placements and Financing
Roku to Be Acquired by Fox in Merger
Positive
Jun 15, 2026
On June 14–15, 2026, Roku and Fox Corporation agreed to a cash-and-stock merger under which Fox will acquire Roku for $160 per share, valuing Roku at about $22 billion. Roku shareholders will receive $96 in cash and 0.9693 Fox Class A shares...
Business Operations and StrategyFinancial Disclosures
Roku Restructures Platform Into Advertising and Subscriptions Segments
Neutral
Apr 13, 2026
Roku said it will revise its reportable segments by splitting its existing Platform unit into separate Advertising and Subscriptions segments, aligning external reporting with how the chief executive now reviews the business. The Advertising segme...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.