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The stock has been riding on ROKU’s leading position as a TV streaming platform provider in the United States, Canada and Mexico based on hours streamed. It benefits from growth in advertising, driven by monetized video ad impressions on the increasing popularity of its platform.
Moreover, while already dominant in North America, the company is methodically expanding its footprint internationally. Roku recently launched the National Women's Soccer League Zone, offering its fans a centralized hub for live matches and highlights, and acquired exclusive streaming rights to Just a Bit Outside, a documentary about the 1982 Milwaukee Brewers, which will be available on The Roku Channel.
ROKU’s 6 Month Performance
Image Source: Zacks Investment Research
How is ROKU Winning in Advertising?
Roku’s advertising business is a major growth driver. The advertising business performed exceptionally well in the fourth quarter of 2024, even excluding political ad spending, which represented approximately 6% of Platform revenues. The company is successfully diversifying its advertising base beyond traditional media and entertainment companies, with retail, automotive and other verticals showing strong growth.
The company has partnered with Yahoo DSP, allowing advertisers to better target viewers through Roku Data Cloud and Roku Exchange. Additionally, new advertising units, such as Video Marquee advertisements on the home screen and interactive Brand Showcases, like Neutrogena’s campaign, which achieved one-third of its exclusive reach from Roku’s home screen promotion, have driven higher engagement.
Roku is also expanding its self-service ad platform for small and medium-sized businesses (SMBs). The Roku Ads Manager, launched in 2024, allows SMBs to access TV streaming advertisements, diversifying Roku’s advertiser base. With CTV advertisement spending on the rise and Roku positioned as a market leader, the company is expected to continue to outpace the advertising market in 2025.
ROKU’s Plans for Global Expansion
The company is making significant strides in international expansion, focusing on North America, Central America, Latin America and the U.K. in an attempt to fend off streaming competition from incumbents like Netflix (NFLX - Free Report) , Disney (DIS - Free Report) -owned Disney+ and Amazon (AMZN - Free Report) Prime Video offering extremely cheap sources of TV programming and solid content.
Roku is already the leading streaming platform in Canada, Mexico and the United States (based on hours streamed) and is rapidly growing in Latin America and the U.K. To support this, the company has expanded partnerships with TV manufacturers and retailers in Brazil, Colombia, Chile, Peru and the U.K.
As part of its efforts to enhance its user experience, Roku expanded the Roku TV line-up of premium offerings with the introduction of the OLED Philips Roku TV. The OLED Philips Roku TV combines high-quality visual performance with an elevated streaming experience and Roku features, including Backdrops, integration with Roku Smart Home devices and much more.
Meanwhile, Roku has started focusing on monetizing Mexico, where it has more than 40% broadband penetration. Other Latin American markets remain in the scale-building phase, with monetization expected to begin with the increasing adoption of digital advertising. Roku expects to reach 100 million streaming households in 2026, positioning international markets as a major revenue contributor in the future.
ROKU’s Positive Outlook for 2025
For 2025, Roku expects total net revenues of $4.61 billion, representing 12% year-over-year growth. Platform revenues are anticipated to reach $3.95 billion, up 12% year over year. Excluding political ad spending, this represents 15% growth, slightly above the 2024 rate.
Roku projects an Adjusted EBITDA of $350 million for 2025, indicating a 35% increase from the 2024 level. This demonstrates improving profitability as the company scales.
The Zacks Consensus Estimate for 2025 revenues is pegged at $4.62 billion, suggesting 12.23% year-over-year growth. The consensus estimate for earnings is pegged at a loss of 27 cents per share, indicating an improvement of 69.66% year over year. This has been revised downward from a loss of 3 cents per share over the past 30 days. The company had incurred a loss of 89 cents per share in the year-ago period.
Image Source: Zacks Investment Research
ROKU’s Consensus Estimate Trend
Roku’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, with the average surprise being 55.07%
Find the latest earnings estimates and surprises on Zacks Earnings Calendar.
Although the company’s two-year price-to-cash flow ratio of 52.26X is ahead of the Zacks Broadcast Radio and Television industry average of 29.73X, this premium valuation reflects investor confidence in the company's growth potential for the rest of 2025.
ROKU’s Price/Cash Flow Ratio
Image Source: Zacks Investment Research
Here’s Why You Should Buy ROKU Stock Now
Investors should consider buying Roku stock in 2025 for several compelling reasons despite its premium valuation. The company has firmly established itself as the market leader in household streaming, maintaining the #1 position by hours streamed across the United States, Canada and Mexico. Its impressive penetration of over half of U.S. broadband households provides a robust foundation for continued growth. This market dominance gives Roku significant leverage in negotiations with content providers and advertisers alike.
Additionally, the company’s strategic initiatives in advertising, content partnerships and platform monetization are creating multiple revenue streams. International expansion provides a significant growth runway beyond the U.S. market.
Image: Bigstock
Roku Rises 6% in 6 Months: Is it the Right Time to Buy the Stock?
Roku’s (ROKU - Free Report) shares have risen 5.8% in the past six months compared with the Zacks Consumer Discretionary sector’s growth of 5.3%.
The stock has been riding on ROKU’s leading position as a TV streaming platform provider in the United States, Canada and Mexico based on hours streamed. It benefits from growth in advertising, driven by monetized video ad impressions on the increasing popularity of its platform.
Moreover, while already dominant in North America, the company is methodically expanding its footprint internationally. Roku recently launched the National Women's Soccer League Zone, offering its fans a centralized hub for live matches and highlights, and acquired exclusive streaming rights to Just a Bit Outside, a documentary about the 1982 Milwaukee Brewers, which will be available on The Roku Channel.
ROKU’s 6 Month Performance
Image Source: Zacks Investment Research
How is ROKU Winning in Advertising?
Roku’s advertising business is a major growth driver. The advertising business performed exceptionally well in the fourth quarter of 2024, even excluding political ad spending, which represented approximately 6% of Platform revenues. The company is successfully diversifying its advertising base beyond traditional media and entertainment companies, with retail, automotive and other verticals showing strong growth.
The company has partnered with Yahoo DSP, allowing advertisers to better target viewers through Roku Data Cloud and Roku Exchange. Additionally, new advertising units, such as Video Marquee advertisements on the home screen and interactive Brand Showcases, like Neutrogena’s campaign, which achieved one-third of its exclusive reach from Roku’s home screen promotion, have driven higher engagement.
Roku is also expanding its self-service ad platform for small and medium-sized businesses (SMBs). The Roku Ads Manager, launched in 2024, allows SMBs to access TV streaming advertisements, diversifying Roku’s advertiser base. With CTV advertisement spending on the rise and Roku positioned as a market leader, the company is expected to continue to outpace the advertising market in 2025.
ROKU’s Plans for Global Expansion
The company is making significant strides in international expansion, focusing on North America, Central America, Latin America and the U.K. in an attempt to fend off streaming competition from incumbents like Netflix (NFLX - Free Report) , Disney (DIS - Free Report) -owned Disney+ and Amazon (AMZN - Free Report) Prime Video offering extremely cheap sources of TV programming and solid content.
Roku is already the leading streaming platform in Canada, Mexico and the United States (based on hours streamed) and is rapidly growing in Latin America and the U.K. To support this, the company has expanded partnerships with TV manufacturers and retailers in Brazil, Colombia, Chile, Peru and the U.K.
As part of its efforts to enhance its user experience, Roku expanded the Roku TV line-up of premium offerings with the introduction of the OLED Philips Roku TV. The OLED Philips Roku TV combines high-quality visual performance with an elevated streaming experience and Roku features, including Backdrops, integration with Roku Smart Home devices and much more.
Meanwhile, Roku has started focusing on monetizing Mexico, where it has more than 40% broadband penetration. Other Latin American markets remain in the scale-building phase, with monetization expected to begin with the increasing adoption of digital advertising. Roku expects to reach 100 million streaming households in 2026, positioning international markets as a major revenue contributor in the future.
ROKU’s Positive Outlook for 2025
For 2025, Roku expects total net revenues of $4.61 billion, representing 12% year-over-year growth. Platform revenues are anticipated to reach $3.95 billion, up 12% year over year. Excluding political ad spending, this represents 15% growth, slightly above the 2024 rate.
Roku projects an Adjusted EBITDA of $350 million for 2025, indicating a 35% increase from the 2024 level. This demonstrates improving profitability as the company scales.
The Zacks Consensus Estimate for 2025 revenues is pegged at $4.62 billion, suggesting 12.23% year-over-year growth. The consensus estimate for earnings is pegged at a loss of 27 cents per share, indicating an improvement of 69.66% year over year. This has been revised downward from a loss of 3 cents per share over the past 30 days. The company had incurred a loss of 89 cents per share in the year-ago period.
Image Source: Zacks Investment Research
ROKU’s Consensus Estimate Trend
Roku’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, with the average surprise being 55.07%
Find the latest earnings estimates and surprises on Zacks Earnings Calendar.
Although the company’s two-year price-to-cash flow ratio of 52.26X is ahead of the Zacks Broadcast Radio and Television industry average of 29.73X, this premium valuation reflects investor confidence in the company's growth potential for the rest of 2025.
ROKU’s Price/Cash Flow Ratio
Image Source: Zacks Investment Research
Here’s Why You Should Buy ROKU Stock Now
Investors should consider buying Roku stock in 2025 for several compelling reasons despite its premium valuation. The company has firmly established itself as the market leader in household streaming, maintaining the #1 position by hours streamed across the United States, Canada and Mexico. Its impressive penetration of over half of U.S. broadband households provides a robust foundation for continued growth. This market dominance gives Roku significant leverage in negotiations with content providers and advertisers alike.
Additionally, the company’s strategic initiatives in advertising, content partnerships and platform monetization are creating multiple revenue streams. International expansion provides a significant growth runway beyond the U.S. market.
ROKU currently carries a Zacks Rank #2 (Buy) and has a Growth Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.