Roku: Inflection Point In 2025

Summary:

• Roku has shown steady revenue, active account, and streaming growth in FY 2024.
• Despite ARPU stagnation, Roku’s EBITDA has improved due to cost savings and ad revenue growth.
• GAAP profitability in FY 2025 could be a major inflection point for Roku and its shares.
• The U.S. streaming market’s favorable outlook and Roku’s current valuation offer a contrarian entry opportunity, with a $105 per-share price target for FY 2025.
• Risks include continual ARPU stagnation and failure to achieve GAAP profitability, but recent share consolidation presents a buying opportunity.

Streaming platform Roku (NASDAQ:ROKU) delivered steady active account growth in FY 2024 and the company is primed for consistent growth in FY 2025 as well, with long-term, secular trends in the video streaming market working in

Analyst’s Disclosure: I/we have a beneficial long position in the shares of ROKU, NFLX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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