Key Stats for Roku Stock
- Price Change for Roku stock: 5.5%
- $ROKU Share Price as of Jan. 5: $115
- 52-Week High: $116
- $ROKU Stock Price Target: $118
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What Happened?
Roku (ROKU) stock jumped 5.5% yesterday after Morgan Stanley upgraded the streaming platform to “Overweight” from “Equal Weight” and raised its price target to $135 from $85. The upgrade came alongside continued bullish commentary from other Wall Street firms, reinforcing the stock’s positive momentum.
Morgan Stanley’s $135 price target implies roughly 18% upside from current levels. Wells Fargo maintained its “Overweight” rating with a $116 target, citing expectations for continued platform growth through the first half of 2026. Citizens also reiterated its “Market Outperform” rating with a $145 target, the most bullish of the three.
The upgrade marks a significant shift in sentiment, and this latest rally pushed shares to a new 52-week high of $113.44, capping off a modest 4.3% gain so far in 2026.
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What the Market Is Telling Us About Roku Stock
The bullish analyst views center on Roku’s improving fundamentals and multiple growth drivers coming together. During a recent investor conference, CFO Dan Jedda outlined why the company expects to sustain double-digit growth in platform revenue through 2026.
Roku’s platform revenue is growing roughly 20% when backing out political advertising and its recent Frndly acquisition.
What’s encouraging is that both major components—advertising and subscription revenue—are growing at similar rates. That diversification reduces risk and shows the company isn’t overly dependent on one revenue stream.
On the advertising side, Roku is benefiting from the secular shift of dollars from traditional linear TV to connected TV (CTV).
The total TV advertising market is about $90 billion, with CTV representing roughly $30 billion and growing, while linear’s $60 billion base shrinks. Ad dollars are catching up to where viewership already shifted.
Roku’s advantage is scale. The platform reaches over 50% of U.S. broadband households. That gives it a unique positioning as more streaming services launch ad-supported tiers and as advertisers shift toward programmatic buying focused on performance metrics.
The company’s integration with major demand-side platforms (DSPs), such as Amazon, has opened new revenue streams. Roku now meets advertisers wherever they want to transact—through DSPs, direct buys, or its self-service Ads Manager product targeting small and medium-sized businesses.
Jedda highlighted that Ads Manager is growing significantly faster than the overall platform business and could become a meaningful contributor over time.
On the subscription side, Roku has focused heavily on premium subscriptions since late 2023. The company announced a Tier 1 premium subscription partner in Q3 and said several more are coming.
Premium partners get deeper integration throughout Roku’s interface, creating multiple entry points beyond just an app icon. That drives better engagement and retention for partners while generating more revenue for Roku.
The company is also expanding premium subscriptions internationally, recently launching in Mexico. That’s strategic because it allows Roku to monetize its international scale, even in markets where advertising remains less mature.
From a profitability standpoint, Roku improved EBITDA margins by roughly 200 basis points in 2025 and expects that trend to continue.
The company generated operating profit in Q3 and Q4, marking an inflection point. Crucially, free cash flow is growing even faster than EBITDA because Roku is capital-light with minimal CapEx requirements.
The five-year return tells a different story—investors who bought five years ago are down 66%. But Roku stock appears to be in a different phase now, with sustainable profitability finally in sight alongside continued top-line growth.
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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!
