Roku, Inc. (NASDAQ:ROKU) is a prominent player in the streaming industry, known for its digital media players and smart TV operating systems. The company competes with other streaming giants like Amazon and Apple. On March 23, 2025, Compass Point upgraded Roku's stock to a "Buy" rating, with the stock priced at $78.29 at the time of the announcement.
Roku is on a growth path, aiming for GAAP profitability by 2026. The company has a strong net cash balance and a low valuation, which supports its growth ambitions. In the fourth quarter, Roku reported a 17% year-over-year increase in gross profit, indicating strong financial performance. Management has also provided guidance for continued growth in 2025.
Despite competitive risks, Roku's valuation is attractive, with a potential 50% upside. The company is well-positioned to benefit from the growth of smart TV and digital advertising. As highlighted by Guggenheim Securities, positive analyst coverage has contributed to a significant surge in Roku's stock, with a 9.2% increase as of 3:15 p.m. ET, and a peak increase of 10.5% earlier in the day.
Guggenheim analyst Michael Morris remains optimistic about Roku's business outlook for 2025, despite lowering the one-year price target from $115 to $110 per share. This adjustment reflects a cautious approach to valuations in the sector, not a negative view of Roku's performance. The new price target suggests a potential upside of 36% for the stock.
Roku's stock has seen a positive change of $4.47, a 6.06% increase, with a trading range between $72.02 and $78.68 during the day. Over the past year, the stock has reached a high of $104.96 and a low of $48.33. With a market capitalization of approximately $11.43 billion and a trading volume of 5,833,409 shares, Roku continues to capture investor interest.
