Morgan Stanley's Positive Outlook on Roku and Outfront Media Driven by Optimism in Advertising Expenditure
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 16 2025
0mins
Should l Buy ROKU?
Source: SeekingAlpha
Roku and Outfront Media Ratings Upgrade: Roku and Outfront Media received an "overweight" rating from Morgan Stanley, improving from "underweight," leading to a nearly 4% increase in premarket trading for both companies.
Positive Outlook for U.S. Advertising Market: Analysts expect a strong year for U.S. advertising spending, particularly in connected TV (CTV), driven by the migration of sports and political advertising, which may enhance revenue growth.
Roku's Growth Potential: Morgan Stanley anticipates significant growth for Roku's platform revenue by 2026, supported by an expanding user base, enhanced streaming partnerships, and new monetization strategies.
Outfront Media's Share Upside: The firm projects that Outfront Media's share price will benefit from cyclical events, improved revenue from transit, and easing revenue comparisons, with a price target increase from $20 to $28.
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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: 90.210
Low
100.00
Averages
123.10
High
145.00
Current: 90.210
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.
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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.
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- 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.
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