ROKU Stock Recent News

ROKU remains a compelling streaming stock, despite the recent recovery, thanks to the growing streaming share and the profitable cash flow investment thesis. This is significantly aided by the secular growth in the streaming industry, as the latter's viewing share well exceeds the Broadcast/ Cable viewing shares as of May 2025. Despite our prior tariff concerns, ROKU appears well diversified in its Devices supply strategy as well, with FY2025 unlikely to bring any material change on its gross profit margins.

Roku's new partnership with Amazon is a powerful catalyst for accelerating growth in its digital advertising business and expanding reach. The connected TV market is rapidly growing, and this collaboration allows advertisers to efficiently target over 80 million connected TV users. Roku's gross profit profile is consistently improving, losses are narrowing, and the company is moving toward GAAP operating profitability in FY 2026.

In the closing of the recent trading day, Roku (ROKU) stood at $87.89, denoting a +1.09% move from the preceding trading day.

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?

Roku maintains strong execution and a net cash balance sheet, but growth is decelerating faster than expected, tempering my optimism. Management remains confident in secular streaming trends and profitability targets, despite macro headwinds and minimal implied tariff impact on guidance. Valuation is reasonable with high-single-digit growth and long-term margin potential, though multiple expansion is unlikely as growth slows.

There are multiple reasons to believe that stocks are overvalued right now, generally speaking, motivating me to move on from some old duds in my portfolio.

On June 16, Roku (ROKU 0.50%) announced a partnership with Amazon (AMZN 2.66%) that will allow advertisers access to the streaming specialist's ecosystem through Amazon's advertising platform. This agreement represents a significant move forward for Roku.

Roku (ROKU) has been upgraded to a Zacks Rank #2 (Buy), reflecting growing optimism about the company's earnings prospects. This might drive the stock higher in the near term.

Does Roku (ROKU) have what it takes to be a top stock pick for momentum investors? Let's find out.

Subscribers to  Chart of the Week  received this commentary on Sunday, June 22.