Roku (ROKU): Assessing Valuation After YouTube TV Deal Brings NFL Sunday Ticket and Live Sports to Platform

If you have Roku (ROKU) in your portfolio or on your watchlist, you probably noticed the recent buzz surrounding the company’s YouTube TV partnership. By bringing live sports, such as NFL Sunday Ticket and a variety of new sports channels, straight to users, Roku is positioning itself as a go-to platform for in-demand live programming. The logic from management is clear: live sports draw higher-value audiences and unlock more premium ad dollars, which could translate to stronger growth down the line.

Investors seem receptive to this pivot. Roku shares rallied 4.5% after the news broke, showing renewed momentum after what’s already been a year of considerable stock growth. Over the past year, Roku’s price has climbed 35%, outpacing many peers, with the real surge coming in the past few months. The company has rolled out new streaming devices at steep discounts, expanded its free TV offerings, and made headlines with growing engagement metrics, all pointing to a meaningful shift in both its platform revenues and market positioning.

The question now is whether this string of wins leaves Roku undervalued, or if the market has already factored in future gains. Is there more upside, or is everything already baked in?

Most Popular Narrative: 8.1% Undervalued

The prevailing narrative suggests that Roku remains undervalued, with the current share price sitting at a notable discount to fair value. This view is fueled by expectations for robust long-term growth and earnings expansion.

Ongoing investments in proprietary content (for example, The Roku Channel), self-service ad solutions, and performance marketing are boosting user engagement and attracting new cohorts of advertisers (especially SMBs). These factors are adding incremental high-margin advertising revenue and broadening usage, which are supporting margin and earnings growth.

What is the secret strategy driving this valuation? Get ready for surprising earnings projections, future-focused revenue forecasts, and a profitability turnaround that keeps analysts bullish. Want to see the bold financial assumptions behind this price target? Find out what is powering this growth outlook and why analysts think Roku could be worth much more.

Result: Fair Value of $103.27 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying competition and potential ad market contractions still threaten to disrupt Roku’s growth trajectory and challenge its optimistic forecasts.

Find out about the key risks to this Roku narrative.

Another View: The Market Multiple Perspective

Looking through the lens of a common market multiple, Roku appears expensive compared to the broader entertainment industry. This viewpoint challenges whether the growth optimism fully justifies today's share price or if some caution is warranted. Which outlook will ultimately prove right?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Roku to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Roku Narrative

If you see things differently or want to dive deeper into the details, you can craft your own analysis of Roku in just a few minutes. Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Roku.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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