Roku (ROKU) AI Stock Analysis

• Market Cap: $13.21B
• Dividend Yield: N/A
• Average Volume (3M): 3.14M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.65
• Revenue Growth: 17.30%
• EPS Growth: 81.72%
• Country: US
• Employees: 3,340
• Sector: Communication Services
• Sector Strength: 76
• Industry: Entertainment
• EPS (TTM): -0.19
• Shares Outstanding: 129,534,450
• 10 Day Avg. Volume: 2,704,786
• 30 Day Avg. Volume: 3,140,056
• PEG Ratio: -6.93
• Price to Book (P/B): 5.23
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 43.58
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: 9.43
• Enterprise Value/Gross Profit: 256.30
• Enterprise Value/Ebitda: -146.13
• 1Y Price Target: $96.94
• Price Target Upside: 7.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

• Rating: 73 Outperform
• Price Target: $101.00 ▲(12.07%Upside)

Roku's strong technical momentum and positive earnings call outlook are significant strengths, supported by robust revenue growth. However, stretched valuation metrics and ongoing profitability challenges weigh on the score. The company's strategic focus on platform growth and first-party data utilization presents an optimistic growth trajectory.

Positive Factors

Monetization

Roku is leveraging The Trade Desk and now Amazon as third-party monetization partners, which can improve fill rates over time.

Platform Growth

Roku's partnership strategy can sustain Platform growth.

Revenue Growth

Roku's robust viewing growth is seen as a lead indicator for revenue growth upside.

Negative Factors

Competitive Pressure

The ongoing narrative around potential share loss to Walmart and Vizio is challenging to dispel.

Stock Performance

Roku shares increased +7%, lagging the NASDAQ's +85% gain and many mid-to-large cap stocks in the coverage universe.

Roku Business Overview & Revenue Model

Company Description

Roku, Inc. is a leading streaming platform in the United States, specializing in the provision of streaming services and devices. The company operates within the technology and entertainment sectors, offering a variety of products, including streaming players and TV-related audio devices. Roku's platform allows users to access a wide range of content, including movies, TV shows, live news, sports, and more, by connecting directly to streaming services over the internet.

How the Company Makes Money

Roku primarily generates revenue through three key streams: platform revenue, player revenue, and advertising. Platform revenue is derived from licensing fees paid by content providers, subscription and transaction fees from premium content, and advertising sales on the Roku platform. Player revenue comes from the sale of Roku streaming devices, including streaming players and Roku TVs. Advertising, a significant component of platform revenue, includes revenue from video advertisements, audience development promotions, and digital advertising via the Roku Channel and other streaming services. Partnerships with content providers, advertisers, and smart TV manufacturers further contribute to Roku's earnings, enabling the company to expand its user base and content offerings.

Roku Financial Statement Overview

Summary

Roku demonstrates strong revenue growth and improving cash flow, but persistent net losses and negative profit margins highlight ongoing challenges in achieving profitability. The balance sheet is stable with low leverage, indicating a strong capital structure, although inefficiencies in utilizing equity capital persist.

Income Statement

Roku's revenue has shown consistent growth, increasing from $1.78 billion in 2020 to $4.25 billion in TTM (Trailing-Twelve-Months) 2025. The company achieved a gross profit margin of 43.21% in TTM, indicating efficient cost management. However, the net profit margin remains negative at -24.92%, primarily due to continuous operating losses. Despite improvements, the EBIT and EBITDA margins are still negative, indicating challenges in achieving operational profitability.

Balance Sheet

Roku maintains a solid equity position with an equity ratio of 60.42% in TTM 2025, showcasing a stable capital structure. The debt-to-equity ratio is relatively low at 0.20, reflecting a conservative approach to leveraging. Despite this, the company has struggled to generate positive returns, as indicated by the negative ROE of -4.20%, suggesting inefficiencies in utilizing equity capital for profit generation.

Cash Flow

Roku has demonstrated strong free cash flow growth, with a significant increase in free cash flow from -$149.9 million in 2022 to $303.77 million in TTM 2025. The operating cash flow to net income ratio is robust, indicating effective cash management. The positive shift in free cash flow signals improved operational efficiency and financial health, although ongoing net losses remain a concern.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.11B	3.48B	3.13B	2.76B	1.78B
Gross Profit	1.81B	1.52B	1.44B	1.41B	808.22M
EBITDA	196.91M	-570.67M	-382.96M	313.21M	49.93M
Net Income	-129.39M	-709.56M	-498.00M	242.38M	-17.51M
Balance Sheet
Total Assets	4.30B	4.26B	4.41B	4.08B	2.27B
Cash, Cash Equivalents and Short-Term Investments	2.16B	2.03B	1.96B	2.15B	1.09B
Total Debt	591.93M	654.27M	664.64M	484.59M	402.68M
Total Liabilities	1.81B	1.94B	1.77B	1.32B	942.53M
Stockholders Equity	2.49B	2.33B	2.65B	2.77B	1.33B
Cash Flow
Free Cash Flow	212.98M	173.24M	-149.90M	188.04M	65.81M
Operating Cash Flow	218.04M	255.86M	11.79M	228.08M	148.19M
Investing Cash Flow	-25.06M	-92.62M	-201.70M	-176.82M	-81.32M
Financing Cash Flow	-89.20M	-61.24M	8.36M	1.00B	509.05M

Roku Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 90.12
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 90.12 is above the 20-day moving average (MA) of 89.29, above the 50-day MA of 81.30, and above the 200-day MA of 76.47, indicating a bullish trend. The MACD of 2.70 indicates Positive momentum. The RSI at 60.80 is Neutral, neither overbought nor oversold. The STOCH value of 27.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ROKU.

Roku Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FOXA	81 Outperform	$24.22B	14.04	16.89%	0.95%	15.70%	26.73%
DIS	78 Outperform	$219.24B	25.11	8.75%	0.82%	5.33%	431.28%
NFLX	75 Outperform	$501.74B	50.32	43.55%	―	14.28%	46.86%
ROKU	73 Outperform	$13.21B	―	-4.34%	―	17.30%	81.72%
WMG	68 Neutral	$16.41B	36.81	89.20%	2.31%	-0.91%	-14.87%
Sector *	62 Neutral	$42.18B	-1.56	-12.06%	2.81%	2.10%	-71.01%
WBD	60 Neutral	$32.93B	―	-27.69%	―	-5.58%	-254.85%

Roku Corporate Events

Roku Holds Annual Stockholders Meeting, Key Proposals Approved

On June 11, 2025, Roku, Inc. held its annual meeting of stockholders, where several key proposals were voted on. Stockholders elected Class II directors to serve until 2028, approved executive compensation, decided on an annual frequency for advisory votes on executive compensation, and ratified the appointment of Deloitte & Touche LLP as the independent accounting firm for 2025. These decisions reflect ongoing governance and operational strategies that may impact Roku’s corporate direction and stakeholder relations.

The most recent analyst rating on (ROKU) stock is a Buy with a $100.00 price target. To see the full list of analyst forecasts on Roku stock, see the ROKU Stock Forecast page.

Roku Announces Resignation of Senior VP Louise Pentland

On May 1, 2025, Roku announced that Louise Pentland, their Senior Vice President and General Counsel, will resign effective May 16, 2025, to pursue another opportunity. Her resignation is not due to any disagreements with the company or its board, and Roku plans to conduct an executive search for her successor.