Roku Inc (NASDAQ:ROKU) shares are down in early trading on Friday, despite the company reporting upbeat second-quarter results.
The announcement came amid an exciting earnings season. Here are some key analyst takeaways.
JPMorgan On Roku
Analyst Cory Carpenter reaffirmed an Overweight rating, while raising the price target from $100 to $105.
Roku reported revenues of $1.111 million, up 15% year-on-year, surpassing guidance of $1.070 million, Carpenter said in a note. The upside was driven by 18% growth in Platform revenues and a lower-than-expected contraction in Device revenues, he added.
Management raised their 2025 revenue outlook by $100 million to $4.650 million, reflecting 13% year-on-year growth, "with upside driven by an improved Platform growth outlook from 12% to 16% partially offset by a lower Device growth outlook from flat to slightly down, mostly due to tariffs and related 1P/3P mix," the analyst wrote.
The company raised its 2025 adjusted EBITDA guidance by $25 million to $375M, he further stated.
Wedbush On Roku
Analyst Alicia Reese maintained an Outperform rating, while lifting the price target from $100 to $110.
Roku reported strong second-quarter results and raised its 2025 EBITDA guidance, "emphasizing its focus on profitable expansion," Reese said.
Although Roku will be impacted by tariffs this year, it can offset this with platform growth, "driven by revenue diversification, expanding DSP partnerships, growing ad inventory, and improving content recommendations," she added.
Roku is likely to continue gaining market share, with advertising money shifting from linear TV to connected TV, "particularly as advertisers must optimize constrained budgets in 2025," the analyst wrote.
Despite macro pressures, Roku continues to improve its platform capabilities while maintaining expense discipline, she further stated.
Guggenheim Securities On Roku
Analyst Michael Morris reiterated a Buy rating, while raising the price target from $100 to $105.
Roku's platform revenues grew 18% in the second quarter to $1.1 billion, Morris said. Management raised its 2025 revenue and adjusted EBITDA outlook, driven by its increased confidence in the platform segment, he added.
The company guided to platform revenue growth of 16% in the third quarter, higher than consensus of 12%, the analyst stated. "Video advertising remains the largest current growth driver, supported by incremental third-party platform demand and continued growth in engagement on The Roku Channel," he further wrote.
Check out other analyst stock ratings.
KeyBanc Capital Markets On Roku
Analyst Justin Patterson reaffirmed an Overweight rating, while raising the price target from $115 to $116.
Roku’s second-quarter results benefited from the Frndly TV acquisition, Patterson said. The company's path to profitability has become clearer, he added.
"Roku’s Platform business continues to scale, and the Company has opted to shift resources from first-party to third-party Devices sales to minimize profitability drags amid tariffs," the analyst wrote. He expects Roku's EBITDA to nearly double from 2025 to 2027.
Needham On Roku
Analyst Laura Martin maintained a Buy rating, while taking the price target higher, from $100 to $110.
Roku is rapidly expanding its margin and is likely to reach positive operating income by the fourth quarter of this year, Martin said. The company's revenue growth is expected to be stable at 17% year-on-year in the back half of the year, she added.
Being capex light, Roku's adjusted EBITDA and free cash flows "are typically identical," the analyst stated. Roku is "committed to maintaining double-digit platform revenue growth while improving profitability through margin expansion in FY25," she further wrote.
Rosenblatt Securities On Roku
Analyst Barton Crockett reiterated a Neutral rating and price target of $101.
Roku's adjusted EBITDA grew by 79% year-on-year to $78 million, topping guidance by $8 million, Crockett said. The third-quarter adjusted EBITDA guidance of $110 million came in slightly above consensus, he added.
Emerging opportunities for Roku include a new DSP/data sharing deal with Amazon.com Inc (NASDAQ:AMZN), which should begin benefiting the company in 2026, the analyst stated.
"Roku is also ramping a promising effort targeting small mid-sized businesses, via self-serve Ads Manager, providing Roku a uniquely scaled opportunity in SMB," he further wrote.
ROKU Price Action: Shares of Roku had declined by 12.68% to $82.22 at the time of publication on Friday.
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