Roku (ROKU) Stock Forecast & Price Target

Roku has achieved significant milestones, with 4Q24 revenue reaching $1.201 billion, reflecting a 22% year-over-year increase that surpassed estimates by approximately $60 million. The Roku Channel has captured an all-time high of 4.9% of U.S. streaming time, demonstrating substantial engagement growth, supported by expanding content partnerships and user experience improvements. Furthermore, Roku's platform revenue has experienced robust growth, with 25% year-over-year increases in 4Q24, alongside a strong financial position characterized by $2+ billion in cash and no debt, indicating potential for sustained revenue and EBITDA growth moving forward.

Roku operates in a highly competitive streaming market, facing significant risks from major players like Amazon, Google, and Walmart, whose financial strength allows them to subsidize their operating systems, thereby threatening Roku's market share. Notably, the potential for notable streaming services to withdraw from Roku's platform could hinder growth and negatively impact equity sentiment, particularly as consolidation among providers reduces Roku's negotiating power. Additionally, the decline in advertising spend within the media and entertainment sector further complicates Roku's revenue generation, as streaming platforms prioritize profitability over advertising partnerships.