Shares of Roku (ROKU) gained slightly in after-hours trading after the streaming company reported earnings for its first quarter of Fiscal Year 2025. Earnings per share came in at -$0.19, which beat analysts’ consensus estimate of -$0.26 per share. In addition, sales increased by 15.7% year-over-year, with revenue hitting $1.02 billion. This beat analysts’ expectations of $1.01 billion.
When breaking down the numbers further, Roku reported impressive results for its Platform segment, with revenue coming in at $881 million and growing 17% year-over-year. The company also expanded its reach in the U.S., as its services are now available in over half of broadband households.
Furthermore, the Roku Channel saw significant growth, with streaming hours increasing by 5.1 billion hours year-over-year to 35.8 billion hours in Q1. This continues the firm’s trend of consistent growth, as demonstrated by the image below from Main Street Data. The channel is now also the number two app on the platform in the U.S. by engagement.
Roku’s Outlook for 2025
For the second quarter of 2025, Roku expects total net revenue to reach $1.07 billion, which slightly missed estimates. The company also expects a total gross profit of $465 million and adjusted EBITDA of $70 million for the quarter.
For the full year 2025, Roku anticipates total net revenue of $4.55 billion, which is below estimates of $4.583 billion. In addition, the company now expects to see positive operating income by 2026.
What Is the Fair Value of Roku Stock?
Overall, analysts have a Moderate Buy consensus rating on ROKU stock based on 14 Buys, nine Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average ROKU price target of $94.19 per share implies 40.2% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
