Stock Price & Analysis

Based on the provided data and recent market activity, here's a comprehensive analysis of ROKU stock:

Recent Performance and Technical Analysis

The stock has shown significant volatility recently, with the price declining from $94 to around $89 level. The stock is currently showing bearish momentum in the short term, having fallen 4.24% in the latest trading session.

Fundamental Strengths

• Strong Platform Growth: Q4 2024 platform revenue exceeded $1 billion, growing 25% year-over-year
• User Base Expansion: Reached 89.8 million streaming households globally by end of December 2024, surpassing 90 million in early January 2025
• Market Penetration: Now reaches nearly half of all U.S. broadband households
• Engagement Growth: Streaming hours increased 18% year-over-year to 34 billion in Q4

Financial Outlook

Management has provided strong guidance for 2025:

• Total revenue expected at $4.61 billion
• Total gross profit projected at $2.005 billion
• Adjusted EBITDA forecast of $350 million

Valuation Analysis

The stock currently trades at approximately 3x consensus 2025 revenue, significantly below its historical multiples from 2021.

Risks and Challenges

• Increasing competition from major tech players like Netflix, Meta, and Alphabet in video advertising
• Historical price volatility: Returns were -31% in 2021, -82% in 2022, 125% in 2023, and -19% in 2024

Analyst Sentiment

Wall Street sentiment has improved:

• Number of "buy" ratings increased from 7 to 10 since last summer
• Short interest has decreased from 8% to 5.6%

Recommendation

Given the strong fundamental growth, improving margins, and reasonable valuation multiple, ROKU appears to be a BUY at current levels. The company's market leadership position and continued user growth provide a solid foundation for future appreciation.

Based on the provided data and technical analysis, here is the ROKU stock price prediction for 2025:

ROKU is expected to reach $95-100 by end of 2025, driven by the company's expanding streaming platform and advertising revenue growth. The stock shows strong technical support at $82.50 (Fibonacci S1 level) with resistance at $100.91 (Fibonacci R1), suggesting a bullish channel formation.

The recent price consolidation between $85-95 range and positive MACD divergence (MACD at 3.42 with histogram at 0.69) indicates potential upward momentum building.

The S1 support level for ROKU Stock is $82.99 ,The R1 resistant level for ROKU Stock is $101.14.

As of the end of day on 2025-02-26, the price of ROKU Stock was $86.7.

The target price for ROKU Stock according to analyst rating is 105.82, with the highest price target at 130.00 and the lowest at 58.00. Analysts have a Moderate Buy rating on ROKU Stock overall.

The market cap of ROKU is $12.5B.

Based on the provided data and recent market developments, here's a comprehensive analysis of ROKU's valuation:

Technical Analysis

The stock is currently showing mixed signals with RSI at 55.26, indicating neutral momentum. Price is trading above key moving averages (SMA 20: $85.47, SMA 200: $69.74), suggesting an overall upward trend. However, the stock recently experienced a -4.24% decline in the last trading session, closing at $88.86.

Fundamental Analysis & Valuation

The company shows concerning fundamentals:

• Net loss widened to -$709.6M in 2023 from -$498M in 2022
• Net margin deteriorated to -20.36% from -15.93%
• ROE declined to -28.54% from -18.40%

However, there are positive developments:

• Revenue grew 11.5% YoY to $3.48B in 2023
• Platform revenue crossed $1B in Q4 2024, up 25% YoY
• Active accounts reached 89.8M, surpassing 90M in early January 2025
• Streaming hours increased 18% YoY to 34B in Q4

Growth Catalysts & Risks

Positive Factors:

• Strong market position reaching nearly 50% of US broadband households
• Improving cost controls with operating expenses up only 2% YoY
• Generated $203M free cash flow in 2024

Risks:

• Increasing competition from Netflix, Meta, and Alphabet in video advertising
• Continued dependency on advertising revenue makes it vulnerable to economic cycles
• Trading at 3x 2025 consensus revenue, though below historical multiples

Conclusion ROKU appears overvalued at current levels considering:

1. Deteriorating profitability metrics
2. Intense competition in streaming advertising
3. Premium valuation despite operational challenges
4. Uncertain path to sustainable profitability
5. Recent technical weakness despite broader market strength

Roku, Inc. operates a television (TV) streaming platform. The Company connects viewers to the streaming content they love, enable 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 includes licensing arrangements with service operators and TV brands in addition to sales of streaming players, audio products, smart home products and services. Roku TV models are available in the United States and in select countries through licensing arrangements with TV OEM brands.

Based on the available data and market analysis, here is a projection for ROKU stock price in 2030:

ROKU stock is projected to reach $175-200 by 2030, driven by continued streaming adoption and advertising revenue growth. The company's strong market position in North America and expanding user base (reaching 89.8 million streaming households in early 2025) provide a solid foundation for long-term growth. The shift from linear TV to streaming, with streaming now accounting for over 41% of US TV viewing time, positions ROKU well for sustained revenue expansion.

The stock's current valuation at 2.8x forward sales compared to historical average of 9.1x suggests significant upside potential as the company continues executing on its growth strategy and improving profitability through cost controls and operating leverage.

ROKU has a total of 3150 employees.