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Roku
(NASDAQ:ROKU)
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Rating:69Neutral
Price Target:
$167.00
▲(4.53% Upside)
Action:Downgraded
Date:10/16/26
The score is primarily supported by strong financial performance—especially robust free cash flow and low leverage alongside improved profitability. Offsetting this are a neutral-to-soft technical backdrop and a high P/E valuation that leaves less margin for error. The Fox merger approval adds a meaningful positive event-driven tailwind.
Positive Factors
Strong Cash Generation
Roku’s strong operating and free cash flow indicates that its improved earnings are converting into liquidity that can fund platform investment, product development, and strategic initiatives. The close alignment between free cash flow and net income further supports the quality of current profitability.
Negative Factors
Modest Revenue Growth
The current earnings recovery is relying more on improved profitability than on accelerating demand. If revenue growth remains modest, Roku may have less operating leverage and fewer opportunities to expand advertising, distribution, and platform earnings over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Cash Generation
Roku’s strong operating and free cash flow indicates that its improved earnings are converting into liquidity that can fund platform investment, product development, and strategic initiatives. The close alignment between free cash flow and net income further supports the quality of current profitability.
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
$23.40B
Dividend YieldN/A
Average Volume (3M)1.74M
Price to Earnings (P/E)65.7
Beta (1Y)2.25
Revenue Growth18.52%
EPS GrowthN/A
CountryUS
Employees3,600
SectorCommunication Services
Sector Strength97
IndustryEntertainment
Share Statistics
EPS (TTM)2.40
Shares Outstanding132,140,560
10 Day Avg. Volume1,252,546
30 Day Avg. Volume1,744,008
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 Cap0.81
Enterprise Value/Revenue3.63
Enterprise Value/Gross Profit7.97
Enterprise Value/Ebitda29.12
Forecast
1Y Price Target
$163.67Price Target Upside2.45% Upside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)2.94
Revenue Forecast (FY)$5.63B
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 through two segments: Platform and Devices. Platform revenue is the larger driver and includes (1) advertising sales sold across Roku’s streaming environment (including inventory on Roku-owned/operated properties s...
Roku Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 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
72
Positive
Balance Sheet
80
Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.21B | 4.74B | 4.11B | 3.48B | 3.13B | 2.76B |
| Gross Profit | 2.37B | 2.07B | 1.81B | 1.52B | 1.44B | 1.41B |
| EBITDA | 648.96M | 436.40M | 219.86M | -362.87M | -148.61M | 408.78M |
| Net Income | 355.20M | 88.36M | -129.39M | -709.56M | -498.00M | 242.38M |
Balance Sheet | ||||||
| Total Assets | 4.57B | 4.43B | 4.30B | 4.26B | 4.41B | 4.08B |
| Cash, Cash Equivalents and Short-Term Investments | 2.56B | 2.32B | 2.16B | 2.03B | 1.96B | 2.15B |
| Total Debt | 474.12M | 871.80M | 591.93M | 654.27M | 719.33M | 521.71M |
| Total Liabilities | 1.75B | 1.78B | 1.81B | 1.94B | 1.77B | 1.32B |
| Stockholders Equity | 2.82B | 2.66B | 2.49B | 2.33B | 2.65B | 2.77B |
Cash Flow | ||||||
| Free Cash Flow | 824.98M | 478.44M | 212.98M | 173.24M | -149.90M | 188.04M |
| Operating Cash Flow | 834.11M | 483.72M | 218.04M | 255.86M | 11.79M | 228.08M |
| Investing Cash Flow | -500.73M | -782.37M | -25.06M | -92.62M | -201.70M | -176.82M |
| Financing Cash Flow | -579.00M | -280.10M | -89.20M | -61.24M | 8.36M | 1.00B |
Roku Technical Analysis
Positive
159.76
Price Trends
155.03
Positive
146.93
Positive
126.09
Positive
Market Momentum
0.68
Negative
66.37
Neutral
93.15
Negative
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 159.76 is above the 20-day moving average (MA) of 153.49, above the 50-day MA of 155.03, and above the 200-day MA of 126.09, indicating a bullish trend. The MACD of 0.68 indicates Negative momentum. The RSI at 66.37 is Neutral, neither overbought nor oversold. The STOCH value of 93.15 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ROKU.
Roku Risk Analysis
Roku disclosed 72 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 | $286.02B | 18.48 | 50.41% | ― | 15.41% | 43.84% | |
71 Outperform | $192.82B | 23.00 | 7.87% | 1.34% | 5.31% | -23.96% | |
69 Neutral | $23.40B | 65.74 | 13.18% | ― | 18.52% | ― | |
68 Neutral | $26.66B | 15.07 | 14.74% | 0.87% | 5.07% | -20.95% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
ROKU
Roku
160.06
61.78
62.86%
DIS
Walt Disney
113.13
1.71
1.54%
NFLX
Netflix
67.05
-44.31
-39.79%
FOXA
Fox
68.27
10.00
17.17%
Roku Corporate Events
Business Operations and StrategyM&A TransactionsShareholder Meetings
Roku Shareholders Approve Merger with Fox Corporation
Positive
Oct 15, 2026
On June 14, 2026, Roku entered into a merger agreement with Fox Corporation under which Roku will undergo a two-step merger structure and ultimately become a wholly owned subsidiary of Fox. This transaction is designed to integrate Roku’s st...
M&A TransactionsRegulatory Filings and Compliance
Roku Issues Supplemental Disclosures on Fox Acquisition Deal
Neutral
Oct 6, 2026
On June 14, 2026, Roku agreed to be acquired by Fox Corporation through a two-step merger that will ultimately make Roku a wholly owned subsidiary of Fox, with Fox issuing Class A common stock to Roku shareholders. Following the SEC’s effect...
Business Operations and StrategyLegal ProceedingsM&A TransactionsRegulatory Filings and Compliance
Roku Faces DOJ Scrutiny in Fox Merger Review
Neutral
Sep 9, 2026
On June 14, 2026, Roku entered into a merger agreement with Fox Corporation under which Roku would become a wholly owned subsidiary of Fox through a two-step merger structure involving Falcon Merger Sub entities. The planned transaction, which wou...
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.