Roku (ROKU) Stock Forecast & Price Target

Roku has established itself as a dominant player in the streaming industry, with over 90 million streaming households and accounting for 6.1% of total streaming time, reflecting a year-over-year increase. The company's platform revenue is projected to expand by 15.4% to $4.75 billion, driven by strong growth in subscription services, data licensing, and advertising metrics, particularly through its free ad-supported Roku Channel. Furthermore, Roku is expected to experience significant EBITDA margin expansion, supported by its operational leverage and focus on free cash flow generation, indicating a favorable trajectory for profitable growth in the near future.

Roku faces a challenging financial outlook due to a volatile advertising market that could lead to a deceleration in revenue growth, with core platform revenue growth projected to decline from 19% in 4Q25 to approximately 12% in 1Q26. Furthermore, the company’s device segment is currently operating at a loss as it employs a loss-leader strategy to enhance platform adoption, which may become further exacerbated by rising component costs and increased competitive pressures. Additionally, potential margin pressures from content costs associated with The Roku Channel and headwinds from international expansion and average revenue per user (ARPU) dynamics contribute to a negative outlook on the company's profitability.