Roku (ROKU)
NASDAQ:ROKU
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Roku
(NASDAQ:ROKU)
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Rating:73Outperform
Price Target:
$130.00
▲(11.89% Upside)
Action:ReiteratedDate:05/01/26
The score is driven by strong cash flow, improved profitability, and conservative leverage, supported by bullish technical momentum. Offsetting these strengths are a very high P/E valuation and a financial profile that still depends on sustaining platform-led growth and margin gains while devices remain a drag and second-half advertising visibility is less certain.
Positive Factors
Strong free cash flow
Sustained high free cash flow and close alignment with reported earnings indicate durable cash generation and high earnings quality. Strong FCF funds reinvestment in platform products, M&A, and buffer for device losses, improving financial flexibility and reducing refinancing or capital-raising needs over time.
Negative Factors
Device revenue & margin pressure
Ongoing device unit ASP declines and negative device margins create a persistent drag on consolidated profitability. If hardware economics don't improve, devices will continue to consume cash or offset platform margin gains, limiting overall margin sustainability despite platform strength.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow
Sustained high free cash flow and close alignment with reported earnings indicate durable cash generation and high earnings quality. Strong FCF funds reinvestment in platform products, M&A, and buffer for device losses, improving financial flexibility and reducing refinancing or capital-raising needs over time.
Read all positive factors
Roku (ROKU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.22B
Dividend YieldN/A
Average Volume (3M)2.44M
Price to Earnings (P/E)40.7
Beta (1Y)2.31
Revenue Growth16.78%
EPS GrowthN/A
CountryUS
Employees3,340
SectorCommunication Services
Sector Strength97
IndustryEntertainment
Share Statistics
EPS (TTM)1.36
Shares Outstanding130,717,710
10 Day Avg. Volume2,467,003
30 Day Avg. Volume2,435,131
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 Cap0.95
Enterprise Value/Revenue3.50
Enterprise Value/Gross Profit7.92
Enterprise Value/Ebitda48.76
Forecast
1Y Price Target
$144.68Price Target Upside24.52% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering24
EPS Forecast (FY)2.2
Revenue Forecast (FY)$5.51B
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 spor...
How the Company Makes Money
Roku generates revenue primarily through its Platform business and secondarily through its Devices business. Platform revenue includes (1) advertising sales, where Roku sells video and display ad inventory across Roku properties such as the Roku h...
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 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 | 356.31M | 334.98M | 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 | 412.70M | 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
95.32
Positive
99.85
Positive
97.46
Positive
Market Momentum
4.25
Negative
75.56
Negative
97.92
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 116.19 is above the 20-day moving average (MA) of 99.04, above the 50-day MA of 95.32, and above the 200-day MA of 97.46, indicating a bullish trend. The MACD of 4.25 indicates Negative momentum. The RSI at 75.56 is Negative, neither overbought nor oversold. The STOCH value of 97.92 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 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $387.65B | 19.21 | 49.24% | ― | 18.57% | 45.93% | |
73 Outperform | $18.22B | 40.72 | 3.40% | ― | 16.78% | ― | |
68 Neutral | $182.61B | 21.11 | 11.35% | 1.10% | 3.83% | 120.34% | |
68 Neutral | $25.51B | 34.54 | 16.22% | 0.75% | 9.20% | -10.54% | |
62 Neutral | $67.61B | 98.11 | 2.05% | ― | -5.02% | ― | |
61 Neutral | $14.62B | 22.61 | 48.36% | 2.47% | 8.46% | -40.64% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
ROKU
Roku
126.02
65.73
109.02%
DIS
Walt Disney
101.31
10.15
11.13%
NFLX
Netflix
91.02
-22.75
-20.00%
FOXA
Fox
62.36
13.29
27.08%
WMG
Warner Music Group
28.11
-1.72
-5.76%
WBD
Warner Bros
26.96
18.53
219.81%
Roku Corporate Events
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.