Roku Shares Surge 15% Following Strong Q3 Earnings Report
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 31 2025
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Should l Buy ROKU?
Source: SeekingAlpha
Q3 Financial Performance: Roku reported a profit of $28.8 million for Q3, with earnings of 16 cents per share, surpassing analyst expectations of 8 cents. Revenue increased by 14% to $1.21 billion, aligning with consensus estimates.
Q4 Forecast: For the fourth quarter, Roku anticipates revenue of $1.35 billion and gross profit of $575 million, both exceeding Wall Street's expectations, along with an adjusted EBITDA of $395 million.
User Engagement: Users streamed 36.5 billion hours in Q3, a 15% increase from the previous year, although it fell short of the estimated 37.5 billion hours.
Market Reaction: Following the earnings report, Roku's shares initially dropped over 15% but rebounded to a 15.6% increase in Friday's trading.
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Analyst Views on ROKU
Wall Street analysts forecast ROKU stock price to rise
23 Analyst Rating
19 Buy
4 Hold
0 Sell
Strong Buy
Current: 82.930
Low
100.00
Averages
123.10
High
145.00
Current: 82.930
Low
100.00
Averages
123.10
High
145.00
About ROKU
Roku, Inc. operates a television (TV) streaming platform. The Company connects viewers to the streaming content they love, enables content publishers to build and monetize large audiences, and provides advertisers with capabilities to engage consumers. The Company’s segments include platform and devices. The platform segment is engaged in the sale of digital advertising (including direct and programmatic video advertising, media and entertainment promotional spending, and related services) and streaming services distribution (including subscription and transaction revenue shares, the sale of premium subscriptions, and the sale of branded app buttons on remote controls). The devices segment is engaged in the sale of streaming players, Roku-branded TVs, smart home products and services, audio products, and related accessories. The Company sells the majority of its devices in the United States through retailers and distributors as well as through the Company’s website.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Roku Reports Strong Q4 Earnings and Positive Guidance
- Profit Turnaround: Roku reported a net income of approximately $80 million in Q4, a significant recovery from a loss of $36 million in the same quarter last year, indicating a notable improvement in profitability and reflecting the effectiveness of its business model and market demand recovery.
- Accelerated Revenue Growth: The company's Q4 total revenue rose 16% year-over-year to about $1.4 billion, with high-margin platform revenue increasing by 18%, accounting for 88% of total revenue, showcasing enhanced competitiveness in the market as growth accelerated from 14% in Q3.
- Positive Outlook: Roku expects platform revenue to grow over 21% year-over-year in Q1 2026, with total revenue projected to rise about 18%, while adjusted EBITDA is anticipated to reach $130 million, demonstrating confidence in future profitability and sustained growth potential.
- Market Competition Risks: Despite Roku's strong financial performance, its stock has declined by 17% year-to-date, facing fierce competition from large tech companies, prompting investors to carefully consider the sustainability of its market leadership amid increasing competitive pressures.
See More
Roku Reports Strong Q4 Earnings and Positive Guidance
- Profit Turnaround: Roku reported a net income of approximately $80 million in Q4, a significant improvement from a loss of $36 million in the same quarter last year, showcasing a remarkable enhancement in profitability that boosts investor confidence.
- Accelerating Revenue Growth: The company's total revenue rose 16% year-over-year to about $1.4 billion in Q4, driven by an 18% increase in high-margin platform revenue, which constitutes 88% of total revenue, indicating strengthening competitive positioning in the market.
- Positive Outlook: Roku anticipates platform revenue growth of over 21% year-over-year in Q1 2026, with total revenue expected to rise about 18%, while adjusted EBITDA is projected to reach $130 million, reflecting strong confidence in future profitability.
- Market Competition Risks: Despite Roku's strong financial momentum, its stock trades at over 40 times the forecasted earnings for fiscal 2026, and it faces fierce competition from deep-pocketed tech giants, which could jeopardize its market leadership, necessitating cautious risk assessment by investors.
See More
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U.S. Stocks Close Higher as Software Stocks Recover
- Market Recovery: The S&P 500 index rose by 0.05%, the Dow Jones Industrial Average by 0.10%, and the Nasdaq 100 by 0.18% on Friday, indicating a recovery after early losses, reflecting cautious optimism among investors regarding future economic prospects.
- Inflation Data Impact: The U.S. January Consumer Price Index rose by 2.4% year-over-year, below the expected 2.5%, marking the smallest increase in seven months, which may prompt the Fed to continue cutting rates, thus providing support for the stock market and alleviating concerns over rate hikes.
- Strong Software Stock Performance: Software stocks like Crowdstrike Holdings and ServiceNow rose over 4% and 3%, respectively, lifting the broader market and indicating a rebound in investor confidence in tech stocks, particularly amid rapid advancements in AI technology.
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Surge in Options Trading Volume for Roku and Itron
- Roku Options Volume: Roku Inc's options trading volume reached 34,468 contracts today, representing approximately 3.4 million shares, which accounts for 95% of its average daily trading volume over the past month, indicating strong market interest in its future performance.
- High Put Option Activity: Among Roku's options, the $85 strike put option expiring on February 13, 2026, has seen particularly high activity with 3,566 contracts traded, representing about 356,600 shares, reflecting investor expectations of potential downside risks in its stock price.
- Itron Options Trading: Itron Inc recorded an options trading volume of 5,353 contracts, equivalent to approximately 535,300 shares, which is about 94% of its average daily trading volume over the past month, showcasing active market engagement with its stock.
- High Call Option Activity: The $105 strike call option for Itron, expiring on March 20, 2026, has seen 1,285 contracts traded today, representing around 128,500 shares, indicating investor confidence in its future upside potential.
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Roku Receives Strong Analyst Upgrades and Price Target Increases
- Analyst Upgrades: JPMorgan analyst Cory Carpenter reiterated Roku as a top pick with an ‘Overweight’ rating, while Rosenblatt double upgraded the stock to ‘Buy’ from ‘Neutral’ with a price target increase from $106 to $118, reflecting strong market confidence in Roku's growth prospects.
- Strong Earnings Report: Roku reported a 16% year-over-year increase in Q4 revenue to $1.39 billion, surpassing analyst expectations of $1.35 billion, and swung to a profit of $0.53 per diluted share compared to a loss of $0.24 per share a year ago, indicating a significant improvement in profitability.
- Optimistic Market Sentiment: Following the strong earnings report, Roku's stock rallied 9%, with retail investor sentiment trending in the ‘extremely bullish’ territory, as many users predicted the stock would cross the $100 mark next week, reflecting high expectations for its future performance.
- Revenue Growth Expectations: The company anticipates platform revenue to grow over 21% year-over-year in Q1 2026, despite a projected mid-single-digit decline in the devices segment, with total net revenue expected to reach $1.2 billion, up approximately 18% from the previous year, showcasing Roku's sustained growth potential in the market.
See More
Roku Reports Strong Q4 Earnings and Positive Guidance
- Profit Turnaround: Roku reported a net income of approximately $80 million in Q4, a significant recovery from a loss of $36 million in the same quarter last year, indicating a notable improvement in profitability and reflecting the effectiveness of its business model and market demand recovery.
- Accelerated Revenue Growth: The company's Q4 total revenue rose 16% year-over-year to about $1.4 billion, with high-margin platform revenue increasing by 18%, accounting for 88% of total revenue, showcasing enhanced competitiveness in the market as growth accelerated from 14% in Q3.
- Positive Outlook: Roku expects platform revenue to grow over 21% year-over-year in Q1 2026, with total revenue projected to rise about 18%, while adjusted EBITDA is anticipated to reach $130 million, demonstrating confidence in future profitability and sustained growth potential.
- Market Competition Risks: Despite Roku's strong financial performance, its stock has declined by 17% year-to-date, facing fierce competition from large tech companies, prompting investors to carefully consider the sustainability of its market leadership amid increasing competitive pressures.
See More
Roku Reports Strong Q4 Earnings and Positive Guidance
- Profit Turnaround: Roku reported a net income of approximately $80 million in Q4, a significant improvement from a loss of $36 million in the same quarter last year, showcasing a remarkable enhancement in profitability that boosts investor confidence.
- Accelerating Revenue Growth: The company's total revenue rose 16% year-over-year to about $1.4 billion in Q4, driven by an 18% increase in high-margin platform revenue, which constitutes 88% of total revenue, indicating strengthening competitive positioning in the market.
- Positive Outlook: Roku anticipates platform revenue growth of over 21% year-over-year in Q1 2026, with total revenue expected to rise about 18%, while adjusted EBITDA is projected to reach $130 million, reflecting strong confidence in future profitability.
- Market Competition Risks: Despite Roku's strong financial momentum, its stock trades at over 40 times the forecasted earnings for fiscal 2026, and it faces fierce competition from deep-pocketed tech giants, which could jeopardize its market leadership, necessitating cautious risk assessment by investors.
See More
French President Celebrates Successful Rocket Launch of 32 Amazon Leo Satellites
- Successful Rocket Launch: The French president celebrated the successful launch of Europe's most powerful rocket, which deployed 32 Amazon Leo satellites into orbit, marking a significant advancement in Europe's space capabilities and enhancing its competitiveness in the global space market.
- Pause on Tech Security Measures: Ahead of the Trump-Xi Jinping meeting, the Trump administration reportedly paused several critical technology security measures targeting China, a decision that could influence the future trajectory of U.S.-China tech relations and reduce market uncertainties.
- Apple Court Victory: Apple secured a courtroom win as a jury rejected claims from Optis Wireless that it infringed on 4G wireless patents, a result that will help protect Apple's intellectual property and strengthen its market position.
- AI Industry Developments: Elon Musk criticized AI startup Anthropic for alleged bias while announcing a $30 billion funding round that pushed its valuation to $380 billion, highlighting the intense competition and rapid evolution within the AI sector.
See More
U.S. Stocks Close Higher as Software Stocks Recover
- Market Recovery: The S&P 500 index rose by 0.05%, the Dow Jones Industrial Average by 0.10%, and the Nasdaq 100 by 0.18% on Friday, indicating a recovery after early losses, reflecting cautious optimism among investors regarding future economic prospects.
- Inflation Data Impact: The U.S. January Consumer Price Index rose by 2.4% year-over-year, below the expected 2.5%, marking the smallest increase in seven months, which may prompt the Fed to continue cutting rates, thus providing support for the stock market and alleviating concerns over rate hikes.
- Strong Software Stock Performance: Software stocks like Crowdstrike Holdings and ServiceNow rose over 4% and 3%, respectively, lifting the broader market and indicating a rebound in investor confidence in tech stocks, particularly amid rapid advancements in AI technology.
- Metal Stocks Retreat: Reports of the Trump administration's plans to narrow tariffs on steel and aluminum products led to declines in metal companies, with Century Aluminum falling over 7%, reflecting the negative impact of policy changes on the sector.
See More
Surge in Options Trading Volume for Roku and Itron
- Roku Options Volume: Roku Inc's options trading volume reached 34,468 contracts today, representing approximately 3.4 million shares, which accounts for 95% of its average daily trading volume over the past month, indicating strong market interest in its future performance.
- High Put Option Activity: Among Roku's options, the $85 strike put option expiring on February 13, 2026, has seen particularly high activity with 3,566 contracts traded, representing about 356,600 shares, reflecting investor expectations of potential downside risks in its stock price.
- Itron Options Trading: Itron Inc recorded an options trading volume of 5,353 contracts, equivalent to approximately 535,300 shares, which is about 94% of its average daily trading volume over the past month, showcasing active market engagement with its stock.
- High Call Option Activity: The $105 strike call option for Itron, expiring on March 20, 2026, has seen 1,285 contracts traded today, representing around 128,500 shares, indicating investor confidence in its future upside potential.
See More
Roku Receives Strong Analyst Upgrades and Price Target Increases
- Analyst Upgrades: JPMorgan analyst Cory Carpenter reiterated Roku as a top pick with an ‘Overweight’ rating, while Rosenblatt double upgraded the stock to ‘Buy’ from ‘Neutral’ with a price target increase from $106 to $118, reflecting strong market confidence in Roku's growth prospects.
- Strong Earnings Report: Roku reported a 16% year-over-year increase in Q4 revenue to $1.39 billion, surpassing analyst expectations of $1.35 billion, and swung to a profit of $0.53 per diluted share compared to a loss of $0.24 per share a year ago, indicating a significant improvement in profitability.
- Optimistic Market Sentiment: Following the strong earnings report, Roku's stock rallied 9%, with retail investor sentiment trending in the ‘extremely bullish’ territory, as many users predicted the stock would cross the $100 mark next week, reflecting high expectations for its future performance.
- Revenue Growth Expectations: The company anticipates platform revenue to grow over 21% year-over-year in Q1 2026, despite a projected mid-single-digit decline in the devices segment, with total net revenue expected to reach $1.2 billion, up approximately 18% from the previous year, showcasing Roku's sustained growth potential in the market.
See More
