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Roku stock jumps after Q1 earnings beat estimates, with platform revenue surging and free cash flow hitting a record high on strong ad and subscription growth.
The Zacks Style Scores offers investors a way to easily find top-rated stocks based on their investing style. Here's why you should take advantage.
Zacks.com users have recently been watching Roku (ROKU) quite a bit. Thus, it is worth knowing the facts that could determine the stock's prospects.
Roku, Inc. has surged to $125 as platform revenues grew at a robust 28% YoY clip in Q1'26, driving bullish sentiment. ROKU's business mix shift to high-margin platform revenue (now 90% of total) has yielded a 165% YoY jump in adjusted EBITDA. Management targets $5.5B revenue and $675M EBITDA in 2026, with free cash flow expected to reach $1B by 2028.
At least five Wall Street firms raised price targets on Roku (NASDAQ:ROKU | ROKU Price Prediction) on May 1 following the streaming platform's Q1 2026 beat-and-raise, with new targets ranging from $140 to $160.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Roku Inc (NASDAQ:ROKU) shares edged higher after the company delivered an earnings beat for the first quarter of 2026, underscoring accelerating profitability in its core streaming platform business. The company reported adjusted earnings of $0.57 per share, comfortably ahead of analyst expectations of $0.33.
Roku's advertising revenue surged by +26.9% YoY in FQ1'26, now comprising 49% of revenues and 65.6% of gross profit, reflecting robust CTV ad monetization trends. Combined with the hardware Roku TV strategy, the growing subscribers/higher engagements, and the expanding streaming/sports offerings, their profitable growth trends are likely to be robust ahead. These reasons may also be why ROKU has felt confident enough to raise their FY2026 guidance, with further outperformance likely based on the outsized FQ1'26 results.
Roku offers "growth at a reasonable price" with secular tailwinds, uncorrelated to the AI/capex-driven semiconductor rally. ROKU's platform revenue is accelerating, driven by new streaming service launches (Peacock, Apple TV) and industry-wide price increases. Guidance was raised: FY26 revenue is now expected at $5.54 billion (+17% y/y) and adjusted EBITDA margin at 12.2%, up 330 bps y/y.
Roku, Inc. (ROKU) Q1 2026 Earnings Call Transcript
The headline numbers for Roku (ROKU) give insight into how the company performed in the quarter ended March 2026, but it may be worthwhile to compare some of its key metrics to Wall Street estimates and the year-ago actuals.