Roku Stock Surges on Strong Q4 Earnings Beat and Analyst Upgrade

TLDR

• Roku stock surged 8.6% Friday after Q4 earnings crushed estimates with EPS of $0.53 versus $0.28 expected and revenue of $1.39 billion, up 16.1% year-over-year
• Company raised full-year 2026 revenue guidance above Wall Street expectations, citing advertising market recovery and record premium subscription additions in Q4
• Management announced new monetization plans including streaming bundles, expansion of $3 “Howdy” service, and deeper partnerships with HBO Max and Amazon
• Analysts responded bullishly with Rosenblatt upgrading to Buy and Wells Fargo raising target to $137, pushing average price target to $123.85
• CEO Anthony Wood sold 50,000 shares worth $4.54 million, part of broader insider selling totaling 234,790 shares worth $24.2 million in recent months

Roku shares jumped 8.6% Friday to close at $90.06 after the streaming platform delivered fourth-quarter results that topped Wall Street expectations. The stock traded as high as $96.55 during the session.

Roku, Inc., ROKU

The company posted earnings per share of $0.53, crushing analyst estimates of $0.28 by $0.25. Revenue came in at $1.39 billion for the quarter, beating the $1.35 billion consensus and marking a 16.1% increase year-over-year.

Trading volume spiked to 14.4 million shares, up 274% from the average daily volume of 3.9 million shares. The stock had closed at $82.93 Thursday before the earnings release.

Revenue Guidance Lifts Investor Confidence

Management raised its full-year 2026 revenue guidance above Street estimates. The company cited an advertising market recovery as a key driver behind the optimistic outlook.

Roku reported record premium subscription additions during Q4. Management highlighted that platform revenue, which carries higher margins, drove gross margin expansion during the quarter.

The streaming company still showed a negative net margin of 0.61% and a negative return on equity of 1.08%. Some analyst models project negative full-year EPS, making sustained margin improvement critical for valuation support.

The company’s market capitalization stands at $13.31 billion. Roku trades at a price-to-earnings ratio of -450.28 with a beta of 1.99.

New Monetization Push Underway

Roku unveiled several new initiatives to boost average revenue per user. The company plans to roll out premium subscription bundles across its platform.

Management announced plans to expand its $3 “Howdy” service to additional platforms. The company is also deepening partnerships with major streaming services including HBO Max and Amazon to drive integration and monetization.

Rosenblatt analyst Barton Crockett upgraded the stock to Buy from Hold. He raised his price target to $118 from $106, calling Roku’s guidance “beatable again.”

Crockett noted that Roku trades at an EV/EBITDA multiple of about 16x. He considers the stock “too cheap” given projected EBITDA growth of 46% compound annual growth rate from 2025 to 2027.

“Big picture – Roku has built a formidable gatekeeper presence for U.S. streaming – half of all streaming in the U.S. on TVs goes through their devices,” Crockett said. Free cash flow currently exceeds EBITDA, and the balance sheet holds no debt with $2.3 billion in cash and investments.

JPMorgan analyst Cory Carpenter maintained Roku as a Top Pick for 2026. He reaffirmed a Buy rating with a $125 price target, citing optimism about platform revenue acceleration.

Carpenter highlighted that Roku’s 2026 platform revenue growth outlook of 18% exceeded the Street’s 15% estimate. He sees potential for over 20% platform revenue growth this year, supported by the Amazon DSP deal and a robust events calendar including U.S. midterms, World Cup, and Winter Olympics.

Wells Fargo raised its price target to $137 with an overweight rating. Morgan Stanley set a $135 target with an overweight rating, while Needham reaffirmed its buy rating with a $110 target.

The stock currently carries a Moderate Buy consensus rating from analysts. Of 30 analysts covering the stock, one assigned a Strong Buy, 25 gave Buy ratings, three issued Hold ratings, and one assigned a Sell rating. The average price target of $123.85 implies 37.5% upside from current levels.

CEO Anthony Wood sold 50,000 shares on February 2 at an average price of $96.48, totaling $4.54 million. Director Neil D. Hunt sold 2,000 shares at $96.48 for $192,960, reducing his position by 20.45%.

CFO Dan Jedda sold 3,000 shares on January 15 at $107.56, totaling $322,680. Overall, insiders sold 234,790 shares worth $24.2 million in the last quarter. Company insiders own 13.98% of the stock.

Institutional investors have been active in Roku shares. Vanguard Group raised its stake by 2.5% in Q3, now holding 13 million shares valued at $1.3 billion. Acadian Asset Management lifted its position by 41.2% during Q2, acquiring 785,864 additional shares.

AQR Capital Management boosted holdings by 275.5% in Q3, adding 1.9 million shares. The firm now owns 2.6 million shares worth $258.9 million. Institutional investors own 86.30% of the company’s stock.

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