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ROKU shares have also lagged behind competitors like Amazon (AMZN - Free Report) , Alphabet (GOOGL - Free Report) and Apple (AAPL - Free Report) during the same period. While Amazon declined 8.9%, Alphabet and Apple saw relatively smaller drops of 6.1% and 5.1%, respectively.
Roku’s sharp stock price decline can be attributed to investor concerns around its competitive positioning and near-term growth visibility. Large ecosystem players Amazon, Alphabet and Apple continue to strengthen their connected TV and advertising capabilities, leveraging scale, data and vertically integrated platforms. Also, Roku’s devices business remains a drag, with management projecting gross margins to stay in the negative mid-teens range in 2026, highlighting the lack of a clear path to profitability and limited contribution to overall growth.
Adding to these challenges, Roku's distribution strategy is also facing obstacles, as Walmart is migrating its house TV brand to Vizio's operating system, raising concerns about potential market share loss in a key retail channel.
ROKU Stock’s Performance
Image Source: Zacks Investment Research
However, we believe the dip offers an attractive opportunity for investors to buy now, supported by Roku’s scalable platform structure, expanding monetization potential and long-term international growth runway.
Platform Strength Fuels Roku’s Prospects
Roku’s platform-driven model remains the key driver of its long-term growth, with Platform revenues now making up the largest share of its business. In 2025, Platform revenues increased 18% year over year to $4.145 billion, and the company expects this momentum to continue. For 2026, Roku projects Platform revenues to grow another 18% to around $4.89 billion, with first-quarter growth expected to exceed 21%. This growth is accompanied by strong profitability, with gross margins for 2026 expected to hold steady at 51%-52%, underscoring the scalability of Roku’s advertising and streaming distribution model.
A key strength of the platform is its large and growing user base, with more than 90 million streaming households globally. Roku’s position as the #1 TV streaming platform by hours viewed enhances its attractiveness to advertisers and strengthens pricing power. Management expects this base to surpass 100 million households in 2026, further expanding monetization potential.
Roku continues to deepen monetization through a diversified advertising ecosystem and expanding subscription offerings. Its open ad platform integrates with leading demand-side platforms such as Amazon DSP, The Trade Desk and Yahoo, while partnerships with measurement providers like Nielsen improve ad effectiveness and transparency. At the same time, its self-serve Roku Ads Manager is unlocking a significant opportunity for small- and medium-sized businesses — a segment representing hundreds of billions in ad spend.
Looking ahead, Roku’s platform is expected to benefit from AI-driven enhancements in content discovery, ad targeting and user engagement, which directly fuel monetization.
Global Expansion Extends ROKU’s Growth Runway
Roku’s international expansion represents a significant long-term growth runway, as the company continues to scale its platform beyond the United States. Markets such as Mexico and Canada have already reached meaningful scale, with monetization gaining traction through advertising and subscriptions.
In Mexico, Roku has achieved user scale comparable to the United States, positioning it to benefit from the ongoing shift toward digital advertising. Canada continues to demonstrate solid ARPU growth alongside increasing streaming households, validating the company’s international model.
Meanwhile, regions such as Brazil and broader Latin America remain in the early stages of user expansion, indicating a multi-year growth opportunity as these markets mature. The FIFA World Cup 2026 is expected to act as a key catalyst for engagement and advertising demand in these regions.
Roku is expanding its footprint through streaming devices and Roku TV models, alongside partnerships with OEMs and distributors across 17 countries. Platform initiatives such as localized ad platform launches and premium subscriptions are driving growth. Over time, international markets are expected to contribute an increasing share of Platform revenues, supporting sustained growth and diversification beyond the U.S. market.
The Zacks Consensus Estimate for 2026 earnings is pegged at $2.10 per share, remaining stable over the past 30 days while surging 59% over the past 60 days, implying robust year-over-year growth of 255.9%.
ROKU’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average positive surprise being 97.81%.
ROKU stock is not so cheap, as suggested by its Value Score of C. In terms of the forward 12-month price-to-earnings ratio, ROKU is currently trading at a premium of 39.66X, higher than the industry’s 25.75X. However, this premium is supported by its profitability turnaround, strong platform growth, consistent AI-led innovation and leadership in the CTV market.
Image Source: Zacks Investment Research
Here’s Why You Must Buy ROKU Stock Now
Despite near-term pressures and a premium valuation, Roku’s accelerating platform revenues, expanding global footprint, rising monetization capabilities and strong earnings momentum position it for sustained growth, making now a good time to pick up shares.
Roku currently sports a Zacks Rank #1 (Strong Buy) along with a Growth Score of B — a combination that underscores its solid growth prospects and attractive investment opportunity, per the Zacks methodology. You can see the complete list of today’s Zacks #1 Rank stocks here.
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ROKU Slumps 12% YTD: Here's Why It Is Time to Buy the Stock
Key Takeaways
Roku Inc. (ROKU - Free Report) shares have experienced significant volatility and a notable 12% year-to-date (YTD) decline, underperforming the broader Zacks Consumer Discretionary sector and the Zacks Broadcast Radio and Television industry.
ROKU shares have also lagged behind competitors like Amazon (AMZN - Free Report) , Alphabet (GOOGL - Free Report) and Apple (AAPL - Free Report) during the same period. While Amazon declined 8.9%, Alphabet and Apple saw relatively smaller drops of 6.1% and 5.1%, respectively.
Roku’s sharp stock price decline can be attributed to investor concerns around its competitive positioning and near-term growth visibility. Large ecosystem players Amazon, Alphabet and Apple continue to strengthen their connected TV and advertising capabilities, leveraging scale, data and vertically integrated platforms. Also, Roku’s devices business remains a drag, with management projecting gross margins to stay in the negative mid-teens range in 2026, highlighting the lack of a clear path to profitability and limited contribution to overall growth.
Adding to these challenges, Roku's distribution strategy is also facing obstacles, as Walmart is migrating its house TV brand to Vizio's operating system, raising concerns about potential market share loss in a key retail channel.
ROKU Stock’s Performance
Image Source: Zacks Investment Research
However, we believe the dip offers an attractive opportunity for investors to buy now, supported by Roku’s scalable platform structure, expanding monetization potential and long-term international growth runway.
Platform Strength Fuels Roku’s Prospects
Roku’s platform-driven model remains the key driver of its long-term growth, with Platform revenues now making up the largest share of its business. In 2025, Platform revenues increased 18% year over year to $4.145 billion, and the company expects this momentum to continue. For 2026, Roku projects Platform revenues to grow another 18% to around $4.89 billion, with first-quarter growth expected to exceed 21%. This growth is accompanied by strong profitability, with gross margins for 2026 expected to hold steady at 51%-52%, underscoring the scalability of Roku’s advertising and streaming distribution model.
A key strength of the platform is its large and growing user base, with more than 90 million streaming households globally. Roku’s position as the #1 TV streaming platform by hours viewed enhances its attractiveness to advertisers and strengthens pricing power. Management expects this base to surpass 100 million households in 2026, further expanding monetization potential.
Roku continues to deepen monetization through a diversified advertising ecosystem and expanding subscription offerings. Its open ad platform integrates with leading demand-side platforms such as Amazon DSP, The Trade Desk and Yahoo, while partnerships with measurement providers like Nielsen improve ad effectiveness and transparency. At the same time, its self-serve Roku Ads Manager is unlocking a significant opportunity for small- and medium-sized businesses — a segment representing hundreds of billions in ad spend.
Looking ahead, Roku’s platform is expected to benefit from AI-driven enhancements in content discovery, ad targeting and user engagement, which directly fuel monetization.
Global Expansion Extends ROKU’s Growth Runway
Roku’s international expansion represents a significant long-term growth runway, as the company continues to scale its platform beyond the United States. Markets such as Mexico and Canada have already reached meaningful scale, with monetization gaining traction through advertising and subscriptions.
In Mexico, Roku has achieved user scale comparable to the United States, positioning it to benefit from the ongoing shift toward digital advertising. Canada continues to demonstrate solid ARPU growth alongside increasing streaming households, validating the company’s international model.
Meanwhile, regions such as Brazil and broader Latin America remain in the early stages of user expansion, indicating a multi-year growth opportunity as these markets mature. The FIFA World Cup 2026 is expected to act as a key catalyst for engagement and advertising demand in these regions.
Roku is expanding its footprint through streaming devices and Roku TV models, alongside partnerships with OEMs and distributors across 17 countries. Platform initiatives such as localized ad platform launches and premium subscriptions are driving growth. Over time, international markets are expected to contribute an increasing share of Platform revenues, supporting sustained growth and diversification beyond the U.S. market.
ROKU’s Earnings Estimate Revision Shows Upward Momentum
The Zacks Consensus Estimate for 2026 earnings is pegged at $2.10 per share, remaining stable over the past 30 days while surging 59% over the past 60 days, implying robust year-over-year growth of 255.9%.
ROKU’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average positive surprise being 97.81%.
Roku, Inc. Price and Consensus
Roku, Inc. price-consensus-chart | Roku, Inc. Quote
Valuation: ROKU Shares Trading at a Premium
ROKU stock is not so cheap, as suggested by its Value Score of C. In terms of the forward 12-month price-to-earnings ratio, ROKU is currently trading at a premium of 39.66X, higher than the industry’s 25.75X. However, this premium is supported by its profitability turnaround, strong platform growth, consistent AI-led innovation and leadership in the CTV market.
Image Source: Zacks Investment Research
Here’s Why You Must Buy ROKU Stock Now
Despite near-term pressures and a premium valuation, Roku’s accelerating platform revenues, expanding global footprint, rising monetization capabilities and strong earnings momentum position it for sustained growth, making now a good time to pick up shares.
Roku currently sports a Zacks Rank #1 (Strong Buy) along with a Growth Score of B — a combination that underscores its solid growth prospects and attractive investment opportunity, per the Zacks methodology. You can see the complete list of today’s Zacks #1 Rank stocks here.