Roku (ROKU) is set to announce fourth-quarter earnings on Thursday, and investors will watch out for the TV streaming company’s advertising monetization and its strategy to diversify demand as well as subscription growth.
Wall Street expects the San Jose, California-based company to post an EPS of $0.29, while revenue is expected to rise 12.5% year-over-year to $1.35B for the quarter.
Roku, for Q4, projected platform growth of over 19% year-over-year, excluding political and Frndly. The firm said Q4 adjusted EBITDA is expected to be $145M, and FY EBITDA margins are expected to be a 200-basis-point improvement year-over-year to approximately 8.4%.
Earlier this month, Oppenheimer upgraded Roku (ROKU) to Outperform from Perform with a fresh price target of $105, citing multiple catalysts and an attractive valuation.
The research firm believes the Amazon partnership should ramp meaningfully throughout 2026, which should drive incremental ad spend on Roku.
“With core platform growth averaging 16% over the past 4 years, AMZN poised to add 100 bps, and the Olympics another 100 bps. We could see FY26/FY27 core platform revenue (ex-political, 606 & Frndly) +17%/+16% vs. our +15%/+16%,” the research firm highlighted.
Wall Street analysts and Seeking Alpha analysts are also bullish on the company and rated it as a Buy.
Seeking Alpha analyst Uttam Dey rated ROKU a Buy, saying that Roku shares have become attractively valued after an AI-driven selloff, despite ad revenue headwinds appearing premature.
Dey highlighted that Roku’s CTV-focused ad revenues are well-positioned for macro catalysts in 2025-2026, including political ad spend and major sporting events occurring this year. Additionally, the firm’s gross margins are improving, with management targeting a 51-52% structure, supported by data-licensing partnerships.
However, Seeking Alpha’s Quant System is cautious and rated it a Hold.
Shares of Roku, which makes streaming devices and owns a complementary ad-supported channel, have fallen over 15% so far this year, underperforming the broader S&P 500 market, which gained about 1.75% during the same period.