Roku's Q4 Performance Praised by Wall Street Analysts
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy ROKU?
Source: seekingalpha
- Platform Revenue Growth: Roku's fourth-quarter platform revenue increased by 18%, driven by strong video advertising performance, which underscores the company's healthy position in the advertising sector and enhances its market standing.
- Favorable Industry Trends: Analysts noted that Roku is expected to benefit from the growth in CTV advertising, ongoing domestic and international streaming video expansion, and improving fill rates in its advertising business, which are anticipated to drive growth into 2026.
- Enhanced Partnerships: The partnership with Amazon DSP is expected to provide additional growth momentum for Roku, alongside increased adoption of premium subscriptions, further boosting advertising revenue.
- Optimistic Investment Outlook: Evercore ISI described Roku's report as a “clean beat,” expecting benefits from U.S. political ad spending and the multi-year growth driver of its Ad Manager platform, maintaining an “outperform” rating and raising the price target to $150.
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Analyst Views on ROKU
Wall Street analysts forecast ROKU stock price to rise
23 Analyst Rating
19 Buy
4 Hold
0 Sell
Strong Buy
Current: 82.930
Low
100.00
Averages
123.10
High
145.00
Current: 82.930
Low
100.00
Averages
123.10
High
145.00
About ROKU
Roku, Inc. operates a television (TV) streaming platform. The Company connects viewers to the streaming content they love, enables content publishers to build and monetize large audiences, and provides advertisers with capabilities to engage consumers. The Company’s segments include platform and devices. The platform segment is engaged in the sale of digital advertising (including direct and programmatic video advertising, media and entertainment promotional spending, and related services) and streaming services distribution (including subscription and transaction revenue shares, the sale of premium subscriptions, and the sale of branded app buttons on remote controls). The devices segment is engaged in the sale of streaming players, Roku-branded TVs, smart home products and services, audio products, and related accessories. The Company sells the majority of its devices in the United States through retailers and distributors as well as through the Company’s website.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Roku Receives Strong Analyst Upgrades and Price Target Increases
- Analyst Upgrades: JPMorgan analyst Cory Carpenter reiterated Roku as a top pick with an ‘Overweight’ rating, while Rosenblatt double upgraded the stock to ‘Buy’ from ‘Neutral’ with a price target increase from $106 to $118, reflecting strong market confidence in Roku's growth prospects.
- Strong Earnings Report: Roku reported a 16% year-over-year increase in Q4 revenue to $1.39 billion, surpassing analyst expectations of $1.35 billion, and swung to a profit of $0.53 per diluted share compared to a loss of $0.24 per share a year ago, indicating a significant improvement in profitability.
- Optimistic Market Sentiment: Following the strong earnings report, Roku's stock rallied 9%, with retail investor sentiment trending in the ‘extremely bullish’ territory, as many users predicted the stock would cross the $100 mark next week, reflecting high expectations for its future performance.
- Revenue Growth Expectations: The company anticipates platform revenue to grow over 21% year-over-year in Q1 2026, despite a projected mid-single-digit decline in the devices segment, with total net revenue expected to reach $1.2 billion, up approximately 18% from the previous year, showcasing Roku's sustained growth potential in the market.
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- High Put Option Activity: Among Roku's options, the $85 strike put option expiring on February 13, 2026, has seen particularly high activity with 3,566 contracts traded, representing about 356,600 shares, reflecting investor expectations of potential downside risks in its stock price.
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- Significant Revenue Growth: Roku's Q4 revenue rose 16% year-over-year to $1.4 billion, primarily driven by strong growth in video advertising and streaming distribution services, enhancing the company's competitive position in the market.
- Expanding User Base: Roku ranks as the number one streaming platform by hours streamed in the U.S., Canada, and Mexico, with over 90 million logged-in households globally, making its advertising platform increasingly attractive to advertisers and solidifying its market position.
- Improved Profitability: The company generated operating income of $66 million this quarter, compared to a loss of $39 million in the same quarter last year, indicating a significant improvement in profitability during its expansion, which boosts investor confidence.
- Optimistic Future Outlook: Roku anticipates full-year revenue to reach $5.5 billion in 2026, up from $4.7 billion in 2025, with CEO Anthony Wood expressing confidence in sustaining double-digit platform revenue growth, further driving the company's long-term development.
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- Core Inflation Eases: Core inflation, excluding food and energy, decreased from 2.7% to 2.5%, the lowest since March 2021, which could influence investor expectations regarding future interest rate policies and subsequently affect stock market performance.
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Roku Receives Strong Analyst Upgrades and Price Target Increases
- Analyst Upgrades: JPMorgan analyst Cory Carpenter reiterated Roku as a top pick with an ‘Overweight’ rating, while Rosenblatt double upgraded the stock to ‘Buy’ from ‘Neutral’ with a price target increase from $106 to $118, reflecting strong market confidence in Roku's growth prospects.
- Strong Earnings Report: Roku reported a 16% year-over-year increase in Q4 revenue to $1.39 billion, surpassing analyst expectations of $1.35 billion, and swung to a profit of $0.53 per diluted share compared to a loss of $0.24 per share a year ago, indicating a significant improvement in profitability.
- Optimistic Market Sentiment: Following the strong earnings report, Roku's stock rallied 9%, with retail investor sentiment trending in the ‘extremely bullish’ territory, as many users predicted the stock would cross the $100 mark next week, reflecting high expectations for its future performance.
- Revenue Growth Expectations: The company anticipates platform revenue to grow over 21% year-over-year in Q1 2026, despite a projected mid-single-digit decline in the devices segment, with total net revenue expected to reach $1.2 billion, up approximately 18% from the previous year, showcasing Roku's sustained growth potential in the market.
See More
French President Celebrates Successful Rocket Launch of 32 Amazon Leo Satellites
- Successful Rocket Launch: The French president celebrated the successful launch of Europe's most powerful rocket, which deployed 32 Amazon Leo satellites into orbit, marking a significant advancement in Europe's space capabilities and enhancing its competitiveness in the global space market.
- Pause on Tech Security Measures: Ahead of the Trump-Xi Jinping meeting, the Trump administration reportedly paused several critical technology security measures targeting China, a decision that could influence the future trajectory of U.S.-China tech relations and reduce market uncertainties.
- Apple Court Victory: Apple secured a courtroom win as a jury rejected claims from Optis Wireless that it infringed on 4G wireless patents, a result that will help protect Apple's intellectual property and strengthen its market position.
- AI Industry Developments: Elon Musk criticized AI startup Anthropic for alleged bias while announcing a $30 billion funding round that pushed its valuation to $380 billion, highlighting the intense competition and rapid evolution within the AI sector.
See More
U.S. Stocks Close Higher as Software Stocks Recover
- Market Recovery: The S&P 500 index rose by 0.05%, the Dow Jones Industrial Average by 0.10%, and the Nasdaq 100 by 0.18% on Friday, indicating a recovery after early losses, reflecting cautious optimism among investors regarding future economic prospects.
- Inflation Data Impact: The U.S. January Consumer Price Index rose by 2.4% year-over-year, below the expected 2.5%, marking the smallest increase in seven months, which may prompt the Fed to continue cutting rates, thus providing support for the stock market and alleviating concerns over rate hikes.
- Strong Software Stock Performance: Software stocks like Crowdstrike Holdings and ServiceNow rose over 4% and 3%, respectively, lifting the broader market and indicating a rebound in investor confidence in tech stocks, particularly amid rapid advancements in AI technology.
- Metal Stocks Retreat: Reports of the Trump administration's plans to narrow tariffs on steel and aluminum products led to declines in metal companies, with Century Aluminum falling over 7%, reflecting the negative impact of policy changes on the sector.
See More
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- Roku Options Volume: Roku Inc's options trading volume reached 34,468 contracts today, representing approximately 3.4 million shares, which accounts for 95% of its average daily trading volume over the past month, indicating strong market interest in its future performance.
- High Put Option Activity: Among Roku's options, the $85 strike put option expiring on February 13, 2026, has seen particularly high activity with 3,566 contracts traded, representing about 356,600 shares, reflecting investor expectations of potential downside risks in its stock price.
- Itron Options Trading: Itron Inc recorded an options trading volume of 5,353 contracts, equivalent to approximately 535,300 shares, which is about 94% of its average daily trading volume over the past month, showcasing active market engagement with its stock.
- High Call Option Activity: The $105 strike call option for Itron, expiring on March 20, 2026, has seen 1,285 contracts traded today, representing around 128,500 shares, indicating investor confidence in its future upside potential.
See More
Roku's Q4 Earnings Exceed Expectations, Stock Rallies
- Significant Revenue Growth: Roku's Q4 revenue rose 16% year-over-year to $1.4 billion, primarily driven by strong growth in video advertising and streaming distribution services, enhancing the company's competitive position in the market.
- Expanding User Base: Roku ranks as the number one streaming platform by hours streamed in the U.S., Canada, and Mexico, with over 90 million logged-in households globally, making its advertising platform increasingly attractive to advertisers and solidifying its market position.
- Improved Profitability: The company generated operating income of $66 million this quarter, compared to a loss of $39 million in the same quarter last year, indicating a significant improvement in profitability during its expansion, which boosts investor confidence.
- Optimistic Future Outlook: Roku anticipates full-year revenue to reach $5.5 billion in 2026, up from $4.7 billion in 2025, with CEO Anthony Wood expressing confidence in sustaining double-digit platform revenue growth, further driving the company's long-term development.
See More
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- Inflation Data Decline: The annual inflation rate fell from 2.7% to 2.4% in January, undershooting the expected 2.5%, marking the lowest level since May 2025, indicating a potential economic slowdown that may prompt the Fed to consider interest rate cuts, thus impacting market liquidity.
- Core Inflation Eases: Core inflation, excluding food and energy, decreased from 2.7% to 2.5%, the lowest since March 2021, which could influence investor expectations regarding future interest rate policies and subsequently affect stock market performance.
- Small Caps Lead Gains: The Russell 2000 index rose nearly 1.8%, outperforming large-cap stocks, reflecting increased investor confidence in small businesses and potentially indicating optimism about economic recovery.
- Rivian Stock Surge: Rivian Automotive Inc. shares jumped 27%, marking the strongest day in the company's history, after reporting a narrower-than-expected quarterly loss, which may attract more investor interest in the electric vehicle market.
See More
