Roku (ROKU) Stock Forecast & Price Target

Roku maintains a strong position in the streaming market with over 90 million streaming households and significant engagement, as evidenced by accounting for 6.1% of total streaming time, reflecting a year-over-year increase. The company's projected platform revenue growth of 15.4% to $4.75 billion, driven by diverse revenue streams from device sales, licensing, and advertising, highlights its robust financial performance and the ongoing expansion of its user base. Additionally, Roku's anticipated EBITDA margin expansion and focus on generating free cash flow position the company well for sustained profitable growth, fostering a favorable outlook for its stock.

Roku's negative outlook is primarily linked to potential deceleration in revenue growth, with expectations of core platform revenue increasing by only 12% in 1Q26, contrasting with management's previous guidance of 19% growth in 4Q25. The company is also facing margin pressures due to rising content costs for The Roku Channel and ongoing losses within its Devices business as it employs a loss-leader strategy to enhance platform adoption. Additionally, broader macroeconomic challenges could negatively impact advertising budgets and further exacerbate these financial pressures, particularly if the downturn extends beyond the media and entertainment sector.