Update shared on09 Sep 2025
Fair value Increased 2.09%Analysts have raised their price targets for Roku—now at $103.27—on strong free cash flow forecasts, growing platform revenue from new partnerships and bundled offerings, and sustained momentum in connected TV advertising.
Analyst Commentary
- Bullish analysts are raising price targets based on strong free cash flow forecasts, with some projecting Roku could generate $1.6B in free cash flow by 2023 and see sustained high annualized returns.
- Upside revisions to platform revenue and EBITDA expectations are driven by anticipated benefits from partnerships—especially integration with Amazon's DSP—and new bundled subscription offerings, which are seen as meaningful catalysts for revenue growth.
- Strong quarterly results, particularly a beat-and-raise fueled by video advertising strength, reinforce Roku's status as a leading beneficiary of the continued shift to connected TV advertising.
- Analysts cite profitable expansion, revenue diversification, growing ad inventory, and enhanced content recommendation capabilities as factors supporting improved annual outlooks and offsetting external risks, such as tariffs.
- Positive outlooks are further underpinned by improvements in labor productivity, industry advertising sentiment recovery, and Roku’s “clean exposure” to connected TV, supporting a compelling risk/reward profile even as some believe recent partnership benefits are now largely priced in.
What's in the News
- Roku announced the nationwide launch of Howdy, a new ad-free SVOD service priced at $2.99/month, featuring content from partners such as Lionsgate, Warner Bros. Discovery, and FilmRise, and including Roku Originals (Key Developments, 2025-08-05).
- Roku’s Board of Directors authorized a share repurchase program of up to $400 million in Class A shares, funded by existing cash, with the program running until December 31, 2026 (Key Developments, 2025-07-31).
- The collaboration between Amazon Ads and Roku will give advertisers access to an estimated 80 million U.S. Connected TV households via Amazon DSP, enhancing addressability across major streaming apps and premium publishers, and will be available to all U.S. Amazon DSP advertisers by Q4 2025 (Key Developments, 2025-06-16).
- The exclusive partnership with Amazon aims to improve campaign performance, planning, and measurement at scale, leveraging advanced AI, clean room technology, and Roku’s extensive CTV footprint for increased efficiency and reach (Key Developments, 2025-06-16).
- No significant periodical news for Roku; recent periodical coverage was unrelated, focusing on Rockwell Automation (Periodicals, 2025-07-16).
Valuation Changes
Summary of Valuation Changes for Roku
- The Consensus Analyst Price Target has risen slightly from $101.15 to $103.27.
- The Future P/E for Roku has risen slightly from 53.93x to 55.39x.
- The Net Profit Margin for Roku remained effectively unchanged, moving only marginally from 6.12% to 6.09%.
Disclaimer
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