Roku (ROKU) AI Stock Analysis

• Market Cap: $10.91B
• Dividend Yield: N/A
• Average Volume (3M): 3.62M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.71
• Revenue Growth: 17.30%
• EPS Growth: 81.72%
• Country: US
• Employees: 3,340
• Sector: Communication Services
• Sector Strength: 82
• Industry: Entertainment
• EPS (TTM): -0.19
• Shares Outstanding: 129,534,450
• 10 Day Avg. Volume: 3,466,554
• 30 Day Avg. Volume: 3,618,324
• PEG Ratio: 0.04
• Price to Book (P/B): 2.12
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -37.38
• Enterprise Value/Market Cap: 0.39
• Enterprise Value/Revenue: 0.27
• Enterprise Value/Gross Profit: 2.34
• Enterprise Value/Ebitda: -8.98
• 1Y Price Target: $88.58
• Price Target Upside: 7.80% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21

• Rating: 75 Outperform
• Price Target: $92.00 ▲(11.96%Upside)

Roku's overall stock score is bolstered by positive earnings call sentiment and technical indicators, reflecting strong platform growth and strategic acquisitions. However, ongoing financial challenges, such as negative profit margins and high P/E ratio, pose risks to long-term profitability.

Positive Factors

Acquisitions

The announcement of the Frndly TV acquisition is expected to contribute approximately 200 basis points to revenue.

Financial Performance

Roku is projected to achieve a positive free cash flow exceeding $200 million.

Partnerships

The new partnership integration with Amazon Ads provides advertisers access to a large, connected TV domestic footprint covering 80 million households.

Negative Factors

Macroeconomic Conditions

There is potential downside risk if macroeconomic conditions deteriorate.

Market Competition

There is a risk to sustaining current Platform segment advertising revenue growth over time due to an increasingly competitive CTV industry.

Tariffs and Macroeconomics

Roku shares are down reflecting concerns around tariff impacts and macroeconomic softening.

Roku Business Overview & Revenue Model

Company Description

Roku, Inc., together with its subsidiaries, operates a TV streaming platform. The company operates in two segments, Platform and Player. Its platform allows users to discover and access various movies and TV episodes, as well as live TV, news sports, shows, and others. As of December 31, 2021, the company had 60.1 million active accounts. It also provides digital and video advertising, content distribution, subscription, and billing services, as well as other commerce transactions, and brand sponsorship and promotions; and manufactures, sells, and licenses smart TVs under the Roku TV name. In addition, the company offers streaming players, and audio products and accessories under the Roku brand name; and sells branded channel buttons on remote controls of streaming devices. It provides its products and services through retailers and distributors, as well as directly to customers through its website in the United States, Canada, the United Kingdom, France, Mexico, Brazil, Chile, Peru, North and South Americas, and Europe. Roku, Inc. was incorporated in 2002 and is headquartered in San Jose, California.

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 cash flow improvements. However, persistent net losses and negative profit margins present challenges for profitability. The balance sheet is strong with low leverage, but capital utilization inefficiencies remain.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.25B	4.11B	3.48B	3.13B	2.76B	1.78B
	Gross Profit
1.84B	1.81B	1.52B	1.44B	1.41B	808.22M
	EBIT
-193.18M	-218.17M	-792.38M	-530.89M	235.10M	-15.02M
	EBITDA
30.36M	196.91M	-570.67M	-382.96M	313.21M	49.93M
	Net Income Common Stockholders
-105.96M	-129.39M	-709.56M	-498.00M	242.38M	-17.51M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.26B	2.16B	2.03B	1.96B	2.15B	1.09B
	Total Assets
4.18B	4.30B	4.26B	4.41B	4.08B	2.27B
	Total Debt
496.08M	591.93M	654.27M	664.64M	484.59M	402.68M
	Net Debt
-1.76B	-1.57B	-1.37B	-1.30B	-1.66B	-690.14M
	Total Liabilities
1.65B	1.81B	1.94B	1.77B	1.32B	942.53M
	Stockholders Equity
2.53B	2.49B	2.33B	2.65B	2.77B	1.33B
Cash Flow		Free Cash Flow
303.77M	212.98M	173.24M	-149.90M	188.04M	65.81M
	Operating Cash Flow
310.09M	218.04M	255.86M	11.79M	228.08M	148.19M
	Investing Cash Flow
-33.32M	-25.06M	-92.62M	-201.70M	-176.82M	-81.32M
	Financing Cash Flow
-111.33M	-89.20M	-61.24M	8.36M	1.00B	509.05M

Roku Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 82.17
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 82.17 is above the 20-day moving average (MA) of 74.39, above the 50-day MA of 67.53, and above the 200-day MA of 74.35, indicating a bullish trend. The MACD of 3.02 indicates Negative momentum. The RSI at 66.31 is Neutral, neither overbought nor oversold. The STOCH value of 52.21 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	$23.80B	13.75	16.89%	1.00%	15.70%	26.73%
DIS	78 Outperform	$214.79B	24.40	8.75%	0.85%	5.33%	431.28%
NFLX	76 Outperform	$521.47B	57.90	40.84%	―	14.11%	47.22%
ROKU	75 Outperform	$10.91B	―	-4.34%	―	17.30%	81.72%
WMG	64 Neutral	$13.92B	31.03	89.20%	2.73%	-0.91%	-14.87%
WBD	63 Neutral	$24.81B	―	-27.69%	―	-5.58%	-254.85%
Sector *	61 Neutral	$14.74B	5.90	-4.02%	6.40%	2.72%	-31.67%

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.

Roku Director Ravi Ahuja Resigns Amid Sony Commitments

On March 25, 2025, Ravi Ahuja informed Roku’s Board of Directors of his decision to resign as a director, effective June 11, 2025, due to his commitments as President and CEO of Sony Pictures Entertainment. His departure is not due to any disagreements with Roku, and the board will reduce its size from nine to eight members following his resignation.