Roku Stock Surges Over 30% This Year: Will It Maintain Its Momentum?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 24 2025
0mins
Should l Buy ROKU?
Source: Fool
Roku's Stock Performance: Roku shares have increased over 35% in 2025 due to improved execution and a growing connected-TV advertising market, with the company reporting a 15% year-over-year revenue increase and a strong performance in video advertising.
Competitive Landscape and Risks: Despite Roku's leading position in the U.S. TV streaming market, competition from major players like Amazon and Google poses significant risks, and the company's current valuation requires sustained growth and profitability to remain attractive to investors.
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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: 90.060
Low
100.00
Averages
123.10
High
145.00
Current: 90.060
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 Reports Strong Q4 Earnings and Positive Guidance
- Profit Turnaround: Roku reported a net income of approximately $80 million in Q4, a significant recovery from a loss of $36 million in the same quarter last year, indicating a notable improvement in profitability and reflecting the effectiveness of its business model and market demand recovery.
- Accelerated Revenue Growth: The company's Q4 total revenue rose 16% year-over-year to about $1.4 billion, with high-margin platform revenue increasing by 18%, accounting for 88% of total revenue, showcasing enhanced competitiveness in the market as growth accelerated from 14% in Q3.
- Positive Outlook: Roku expects platform revenue to grow over 21% year-over-year in Q1 2026, with total revenue projected to rise about 18%, while adjusted EBITDA is anticipated to reach $130 million, demonstrating confidence in future profitability and sustained growth potential.
- Market Competition Risks: Despite Roku's strong financial performance, its stock has declined by 17% year-to-date, facing fierce competition from large tech companies, prompting investors to carefully consider the sustainability of its market leadership amid increasing competitive pressures.
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- Improved Profitability: The earnings per share reached $0.53, a notable recovery from a loss of $0.24 a year ago, indicating a significant improvement in the company's profitability, which is likely to boost investor confidence.
- Optimistic Outlook: Roku projects 2026 revenue to hit $5.5 billion, with platform revenue expected to grow by 18% to $4.89 billion, reflecting the company's confidence in future growth, especially with the integration of artificial intelligence technologies.
- Equity Compensation Concerns: Although adjusted EBITDA exceeded $169 million, stock-based compensation costs of $85 million pose a dilution risk, which investors should monitor closely as it impacts actual profitability.
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- Profit Turnaround: Roku reported a net income of approximately $80 million in Q4, a significant improvement from a loss of $36 million in the same quarter last year, showcasing a remarkable enhancement in profitability that boosts investor confidence.
- Accelerating Revenue Growth: The company's total revenue rose 16% year-over-year to about $1.4 billion in Q4, driven by an 18% increase in high-margin platform revenue, which constitutes 88% of total revenue, indicating strengthening competitive positioning in the market.
- Positive Outlook: Roku anticipates platform revenue growth of over 21% year-over-year in Q1 2026, with total revenue expected to rise about 18%, while adjusted EBITDA is projected to reach $130 million, reflecting strong confidence in future profitability.
- Market Competition Risks: Despite Roku's strong financial momentum, its stock trades at over 40 times the forecasted earnings for fiscal 2026, and it faces fierce competition from deep-pocketed tech giants, which could jeopardize its market leadership, necessitating cautious risk assessment by investors.
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Roku Reports Strong Q4 Earnings and Positive Guidance
- Profit Turnaround: Roku reported a net income of approximately $80 million in Q4, a significant recovery from a loss of $36 million in the same quarter last year, indicating a notable improvement in profitability and reflecting the effectiveness of its business model and market demand recovery.
- Accelerated Revenue Growth: The company's Q4 total revenue rose 16% year-over-year to about $1.4 billion, with high-margin platform revenue increasing by 18%, accounting for 88% of total revenue, showcasing enhanced competitiveness in the market as growth accelerated from 14% in Q3.
- Positive Outlook: Roku expects platform revenue to grow over 21% year-over-year in Q1 2026, with total revenue projected to rise about 18%, while adjusted EBITDA is anticipated to reach $130 million, demonstrating confidence in future profitability and sustained growth potential.
- Market Competition Risks: Despite Roku's strong financial performance, its stock has declined by 17% year-to-date, facing fierce competition from large tech companies, prompting investors to carefully consider the sustainability of its market leadership amid increasing competitive pressures.
See More
Roku Reports Strong Q4 Results and Positive Guidance
- Significant Revenue Growth: Roku's Q4 revenue increased by 16% year-over-year to $1.39 billion, surpassing analyst expectations of $1.35 billion, driven by strong performance in advertising and platform segments, particularly video ads and premium subscriptions.
- Improved Profitability: The earnings per share reached $0.53, a notable recovery from a loss of $0.24 a year ago, indicating a significant improvement in the company's profitability, which is likely to boost investor confidence.
- Optimistic Outlook: Roku projects 2026 revenue to hit $5.5 billion, with platform revenue expected to grow by 18% to $4.89 billion, reflecting the company's confidence in future growth, especially with the integration of artificial intelligence technologies.
- Equity Compensation Concerns: Although adjusted EBITDA exceeded $169 million, stock-based compensation costs of $85 million pose a dilution risk, which investors should monitor closely as it impacts actual profitability.
See More
AI Disruption Hits Various Sectors in Stock Market
- Software Sector Pressure: The iShares Expanded Tech-Software ETF (IGV) has fallen nearly 16% over the past month due to fears that AI will diminish demand for software services, leading to a decline in investor confidence in the sector.
- Financial Sector Turmoil: The State Street Financial Select Sector SPDR ETF (XLF) dropped 4.8% last week, marking its worst weekly performance since April, as concerns over Altruist's new AI tax planning tool raised fears about the demand for financial services.
- Office Real Estate Impacted: Stocks in commercial real estate were crushed on Thursday amid concerns that AI could lead to rising unemployment, thereby decreasing demand for office space, reflecting a pessimistic outlook from investors regarding future market conditions.
- Logistics Sector Decline: Investors believe that AI could curb freight inefficiencies, leading to reduced demand for the logistics industry, resulting in a drop in related stock prices and showcasing widespread concerns about the impact of AI across various sectors.
See More
Roku Reports Strong Q4 Earnings and Positive Guidance
- Profit Turnaround: Roku reported a net income of approximately $80 million in Q4, a significant improvement from a loss of $36 million in the same quarter last year, showcasing a remarkable enhancement in profitability that boosts investor confidence.
- Accelerating Revenue Growth: The company's total revenue rose 16% year-over-year to about $1.4 billion in Q4, driven by an 18% increase in high-margin platform revenue, which constitutes 88% of total revenue, indicating strengthening competitive positioning in the market.
- Positive Outlook: Roku anticipates platform revenue growth of over 21% year-over-year in Q1 2026, with total revenue expected to rise about 18%, while adjusted EBITDA is projected to reach $130 million, reflecting strong confidence in future profitability.
- Market Competition Risks: Despite Roku's strong financial momentum, its stock trades at over 40 times the forecasted earnings for fiscal 2026, and it faces fierce competition from deep-pocketed tech giants, which could jeopardize its market leadership, necessitating cautious risk assessment by investors.
See More
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- 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
