Key Takeaways
- Fox completed its $22 billion Roku acquisition on Nov. 6, months ahead of plan, and Roku shares ended their Nasdaq run at $160.52.
- Roku holders receive $95.30 in cash plus 0.9799 of a Fox share, leaving them with 26% of the combined Fox.
- Roku’s final public quarter showed revenue up 24% to $1.5 billion and net income of $183 million.
- Fox’s fiscal second-quarter report in early February will be the first to include Roku and its $400 million savings plan.
Roku (ROKU) traded on Nasdaq for the last time on Friday. Fox Corporation (FOXA) completed its $22 billion acquisition on Nov. 6, months ahead of the first-half 2027 close both companies had targeted in June.
Roku shares finished at $160.52, up 25% over six months. That run started when Bloomberg reported sale talks in June, and the stock spent the months since trading as a bet on the deal.
For Fox, the work starts now. It has promised about $400 million of annual cost savings and expects the deal to add to free cash flow per share by the second full year.
Fox CEO Lachlan Murdoch said the closing “advances the long-term strategy of FOX.” Roku founder Anthony Wood joins Fox’s board.
The final terms shifted slightly
Roku holders didn’t get exactly June’s headline package. They receive:
- $95.30 in cash per share, versus $96 at signing.
- 0.9799 of a Fox Class A share, versus 0.9693.
- A 26% stake in the combined Fox, against roughly 27% expected in June.
The path ran through Washington. The Justice Department issued a second request in September, extending its antitrust review, yet the deal still closed early. S&P will drop Roku from the S&P 400 and related indexes on Nov. 11.
Roku’s final quarter as a public company gave Fox plenty to like…
Third-quarter revenue rose 24% to $1.5 billion, and net income climbed to $183 million from $24.8 million a year earlier.
Fox bought the platform business
Platform revenue grew 23% to $1.3 billion. Advertising rose 23% to $727 million, and subscriptions rose 23% to $581 million.
That beats what social ad platforms managed this season. Snap’s advertising revenue grew 4% in its third quarter, and Pinterest’s total revenue rose 12%.
Devices remain the weak spot, with higher memory costs widening the segment’s gross loss to $48.6 million. Look at where the revenue comes from now:
Platform now brings in close to 87% of revenue, and it’s the piece Fox wants to pair with Tubi’s ad inventory.
Murdoch has said Tubi and The Roku Channel will stay separate services, with ads sold across both. Together they give Fox a direct line into more than 100 million Roku streaming households.
TIKR tracks 27 analysts on Roku. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Roku, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Roku’s Analyst Ratings
Fox shareholders carry the risk
Former Roku holders swapped a standalone growth story for a 26% slice of Fox. Their return now depends on Fox integrating a tech platform while cord-cutting keeps pressuring its cable networks.
The balance sheet changed too. Fox planned about $8 billion of new debt at signing to help fund the roughly $14 billion cash portion, with pro forma net leverage near 2.8x.
So what have investors been willing to pay for Fox’s earnings?
If Roku lifts Fox’s growth rate, that multiple has room to expand. Should integration drag, Fox holders will feel it first.
Insiders took some money off the table before the close. CFO Dan Jedda sold $1.07 million of stock in October, and Media President Charles Collier sold $3.12 million.
My take: Roku holders got a fair exit at about 3.5x forward revenue for a business growing 24%. The harder bet now belongs to Fox. The $400 million savings target looks credible, but keeping Roku neutral for rival streamers while promoting Tubi and Fox One will test the partnership promises Fox made in June.
Fox’s fiscal second-quarter report, expected in early February, will be the first to include Roku. It should show early integration costs and whether platform growth stayed above 20% under new ownership.
So what is Roku stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
