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Roku Inc Class A ROKU Stock Quote

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Morningstar‘s Roku Stock Analysis ROKU

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Positive Q3 for Roku Overshadowed by Weak Ad Revenue Expectations; Lowering FVE to $65

Neil Macker, CFA Senior Equity Analyst

Analyst Note

| Neil Macker, CFA |

Roku posted a positive third quarter with revenue and EBITDA ahead of the FactSet consensus estimates. However, the management commentary about the weak U.S. ad market continuing into 2023 spooked investors, leading to a 15% decline in the share price in after-hours trading. While the revenue growth of 12% came in well ahead of the 3% quarterly guidance, the third quarter had the lowest growth on record, with more headwinds ahead as the fourth quarter top-line guidance of $800 million implies the first revenue decline quarter for Roku. As a result, we are lowering our FVE to $65 from $80 on lower revenue expectations and slower margin expansion due to higher content and R&D costs.

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Key Statistics ROKU

Company Profile ROKU

Business Description

Roku is the leading streaming platform in the U.S. by hours watched with under 59 billion hours of content streamed in 2020. The firm’s eponymous operating system is used not only in Roku’s own hardware but in co-branded TVs and soundbars from manufacturers like TCL, Onn, and Hisense. Roku generates revenue from advertising, distribution fees, hardware sales, OS licensing, and subscription sales.

1155 Coleman Avenue
San Jose, CA, 95110
T +1 408 556-9040
Industry Entertainment
Most Recent Earnings Sep 30, 2022
Fiscal Year End Dec 31, 2022
Employees 3,000