ROKU Stock: Roku Targets Streaming Growth Ahead of Earnings

San Jose-based streaming technology company Roku [ROKU] commands a significant portion of the connected TV market in the US. It earns money via its Roku platform, which involves high-margin services such as digital advertising, content distribution and its own streaming channels, as well as the manufacturing and distribution of streaming devices, connected TVs and smart home products. 

A favorite of Cathie Wood — and still a major holding in her ARK portfolio — ROKU stock had its heyday during the Covid-19 pandemic but has pulled back significantly since, although it still managed to outperform the market in 2025. With a mixed analyst outlook ahead of Q4 2025 earnings, OPTO examines the investment case for ROKU stock, plus what an increased focus on streaming could mean for the company. 

Platform Power

Roku continues to command a key portion of the streaming market in the US, but the company seems to be positioning itself to capture more. According to Nielsen’s ‘The Gauge’ report, in December 2025 over 21% of all US TV viewing took place on the Roku platform. The company’s free streaming service, The Roku Channel, accounted for 3% of total TV usage, rising 45% year-over-year. 

Interestingly enough, Roku expanded its long-term strategic partnership with analytics firm Nielsen in December 2025, which involves using Roku’s data to provide advertisers with “a more accurate view of what audiences watch”. Given the key role advertising has in Roku’s business model, the benefits of this continued partnership are evident.

More surprising was the integration with Amazon [AMZN] Ads, an erstwhile competitor, announced in June 2025. The new tie-in provides advertisers with access to an estimated 80% of connected TV households in the US.

In its Q3 2025 results, announced on October 30, 2025, the company beat both bottom- and top-line estimates, recording revenue of $1.21bn and GAAP EPS of $0.16. Platform revenue made up the bulk of total revenue, growing 17% year-over-year to $1.06bn, with a gross margin of 51.5%. Streaming hours reached 36.5 billion, jumping by 4.5 billion from the year-ago quarter. 

The company also guided revenue of $1.35bn for Q4, above Wall Street’s consensus of $1.32bn, to total $4.69bn in revenue for the whole of 2025. 

In its quarterly letter to shareholders, management underlined a push to boost subscriptions to offerings such as its paid channel Howdy, stating that “we see a significant untapped opportunity for a low-cost, ad-free streaming service, and we are leveraging the power of our platform to drive cost-efficient sign-ups and engagement.”

Roku is expected to report Q4 2025 earnings on Thursday, February 12, after markets close. 

Is Outperforming Enough for ROKU Stock?

Roku listed on the Nasdaq back in 2017, with a price of $14 per share. Gradual growth over the next few years became explosive during the Covid-19 pandemic, with the share price reaching a heady peak of $490.76 on July 27, 2021. 

ROKU shares then began a long pullback, sinking back below the $50 mark by the end of 2022. While prices stabilized somewhat in 2025, the stock has yet to regain anything near its all-time high. 

As of February 9, 2026, the stock was trading at a price of $88.52, down 18.40% in the year to date and up 4.14% in the past 12 months. 

Streaming Contenders: ROKU vs WBD vs TTD

In both the smart devices and streaming markets, Roku contends with both industry heavyweights like Netflix [NFLX] and diversified tech giants such as Apple [AAPL]. However, with streaming and advertising representing the bulk of the company’s revenue, let’s see how it compares to two companies in those sectors: Warner Bros Discovery [WBD] and The Trade Desk [TTD].

Global media conglomerate Warner Bros Discovery operates in three primary segments: studios, which includes film and television production; television networks; and direct-to-consumer, with streaming networks such as HBO Max and Discovery+. The company is currently at the center of a protracted, industry-shaping merger with Netflix, although David Ellison’s Paramount Skydance [PSKY] has submitted a competing bid. 

In Q3 2025, Warner Bros Discovery reported total revenue of $9.05bn, down 6% year-over-year, while streaming revenue of $2.63bn was flat year-over-year. The company’s streaming platforms had an estimated 128 million subscribers in Q3, compared to 110.5 million in the year-ago quarter. According to Nielsen’s The Gauge report, Warner Bros Discovery accounted for 1.4% of total US streaming in December 2025. 

The Trade Desk, meanwhile, is an independent demand-side platform that allows advertisers to run data-driven digital advertising campaigns. On November 6, 2025, the company reported Q3 2025 revenue of $739m, up 18% year-over-year. While it primarily operates via online channels, it does have a connected TV segment; most notably, in October 2025 it announced a partnership with DirecTV to integrate a custom version of its ads platform into the media company’s streaming interface.    

Here are how the three stocks’ fundamentals compare: 

Source: Yahoo Finance

ROKU Stock: The Investment Case

The Bull Case for Roku

Although ROKU stock has performed poorly in 2026 so far, it has received a number of analyst upgrades in the run-up to Q4 earnings. Key partnerships and opportunities for new revenue sources via streaming subscriptions are the key factors behind many of these bullish reports. 

In data compiled by Seeking Alpha in January 2026, 16 out of 28 Wall Street analysts rated the stock a ‘strong buy’, while five rated it a ‘buy’ and seven a ‘hold’. Morgan Stanley backed this largely bullish view in December, citing the size of Roku’s user base, strategic partnerships and new monetization opportunities. Jefferies, meanwhile, upgraded Roku from ‘hold’ to ‘buy’, saying the company offers “one of the cleanest revision stories in internet heading into 2026”. 

Oppenheimer also recently upgraded Roku to ‘outperform’, citing the Amazon partnership’s potential to boost ad spend on the platform and increased viewership during the Winter Olympics. Its price target of $105 represents an upside of 18.62% from the most recent close price. 

The Bear Case for Roku

ROKU stock remains the fifth-largest holding in the combined ARK ETFs portfolio, representing 3.92% of their total value as of February 9, 2026. That said, Wood has been trimming since Q3 2024, dumping nearly 5 million shares over the past five quarters. Whether this represents profit-taking or a gradual paring back of an overweight stock remains to be seen. 

One key risk is the size of Roku’s competitors in both the streaming and connected TV markets, as the company jostles with a number of heavyweights that outstrip it in terms of reach and resources. Another risk is the volatility of the advertising market; unfavorable market conditions could have an outsized impact on Roku’s earnings and foil analyst expectations of a Q4 beat. 

Conclusion

Cathie Wood’s streaming darling remains well below its pandemic-era highs, but a new ads partnership with Amazon and the potential for streaming to become a major future revenue stream have analysts hopeful ahead of Roku’s Q4 earnings release. However, given the volatility of the advertising market, execution risks remain high.