Roku (ROKU) built its empire by making streaming effortless. Once a disruptor in the cable-cutting revolution, it evolved into a digital hub where content of all kinds has a home.
And for those who still can’t get enough of President Donald Trump on their screens, Roku just opened another door. Trump Media and Technology Group (DJT) launched the Truth+ app on Roku, expanding its reach. Truth+ offers live TV, news, and family-friendly content for its target audience. Roku users can download the app, sign in via a QR code, or create an account if they don’t have one.
For Roku, this move could boost engagement and ad revenue, but it also brings risks. Hosting polarizing content may attract a dedicated audience while deterring advertisers or mainstream users.
ROKU shares have jumped over 8% in the last week. But is this just a temporary surge in a crowded streaming market, or should investors add ROKU to their portfolio now?
About Roku Stock
San Jose-based Roku (ROKU) transformed TV, bringing streaming to the masses. With an $11.9 billion market cap, Roku bridges viewers, content creators, and advertisers through its streaming players, Roku TV, and smart home devices. It fuels engagement through licensing deals with TV makers and service operators, shaping the future of digital entertainment one stream at a time.
ROKU stock soared to a 52-week high of $104.96 after its stellar fourth-quarter earnings wowed Wall Street in February. Roku has returned 20.8% over the past 52 weeks.
From a valuation standpoint, ROKU is priced at 2.88 times sales, higher than its industry peers but below its historical average. It’s a price point that suggests growth potential but also reflects the company’s shifting strategy.
Roku Beats Q4 Estimates
The company’s Feb. 13 Q4 earnings release sent shares climbing, as it beats expectations with 22% revenue growth to $1.2 billion and a 56.4% annual reduction in per-share losses to $0.24.
The real story was Roku's Platform revenue that soared 25% annually, crossing the $1 billion mark for the first time in a quarter, while device sales climbed 7% to $165.7 million. Even with a $47.4 million gross loss on devices, platform gross profits surged 22% to $559.9 million, proving Roku’s model is working.
Now embedded in over half of U.S. streaming households, Roku is capitalizing on long-term user engagement. Roku Channel streaming hours skyrocketed 82%, and average revenue per user rebounded to $41.49 from $39.92 in the year-ago quarter, reversing recent stagnation.
Roku’s growth story isn’t slowing down. Fueled by election-driven ad revenue, the company sees strong momentum heading into 2025. The management is forecasting 14% annual revenue growth to $1 billion in Q1, with platform revenue climbing 16%. Gross profit is expected to hit $450 million, while adjusted EBITDA is expected to land at $55 million.
For the current year, Roku projects $4.6 billion in revenue, up from $4.1 billion in 2024, and over $2 billion in gross profit. Plus, by projecting a slimmer $40 million in net loss, profitability is within reach. In his letter to shareholders, founder and CEO Anthony Wood sees “clear paths” to growth, expecting full-year operating income positivity by 2026.
Analysts tracking Roku predict its losses to shrink 22.9% annually to $0.27 per share, with revenue hitting $4.62 billion. Over the longer term, losses are estimated flip to $0.59 per share in profit in fiscal 2026.
What Do Analysts Expect for Roku Stock?
Roku has Wall Street’s attention, with analysts split between cautious optimism and outright bullishness. Of the 27 analysts covering the stock, 15 are all-in with a “Strong Buy,” one advises a “Moderate Buy,” 10 are playing it safe with a “Hold” rating, and just one sees trouble ahead, suggesting a “Strong Sell.”
The average analyst price target of $105.52 hints at 35% upside potential. The Street-high target of $130 suggests the stock could surge as much as 67%.
