TLDR
- Roku reported Q4 earnings of 53 cents per share on $1.39 billion revenue, crushing estimates of 28 cents per share on $1.35 billion revenue
- Shares surged 13% to $93.34 in premarket trading following the earnings beat
- 2026 guidance calls for $635 million EBITDA and $5.5 billion revenue, exceeding Wall Street forecasts
- Analysts raised price targets with Seaport setting a $130 target implying 57% upside
- Platform revenue growth accelerated from 20% in Q3 to 25% in Q4
Roku delivered a crushing earnings beat Thursday that sent shares rocketing 13% higher in premarket trading Friday. The streaming platform reported fourth-quarter adjusted earnings of 53 cents per share on revenue of $1.39 billion.
Wall Street had expected just 28 cents per share on $1.35 billion in revenue. Revenue climbed 16% year-over-year. The earnings surprise marked a 96.3% beat versus analyst estimates.
The strong results triggered a wave of analyst upgrades. Seaport Research Partners raised its price target to $130 from $116 while maintaining a Buy rating. That target represents 57% upside from Thursday’s close.
JPMorgan kept its Overweight rating with a $125 price target. The bank highlighted platform revenue growth of 18% that exceeded the 17% consensus. Core growth accelerated from 20% in the third quarter to 25% in the fourth quarter when excluding political ads and accounting adjustments.
Strong Guidance Powers Rally
The company’s 2026 outlook impressed investors as much as the quarterly results. Roku guided for adjusted EBITDA of $635 million on revenue of $5.5 billion for the current year.
Consensus estimates had called for $603 million in EBITDA and $5.4 billion in revenue. Management projects 18% platform revenue growth for 2026, above the 15% Street estimate. They characterized their second-half outlook as conservative versus first-quarter guidance of 21%.
William Blair analyst Ralph Schackart pointed to “strong traction in subscriptions” and “expanding Roku device reach” in the quarter. He maintains an Outperform rating.
Multiple Growth Catalysts
Several factors are driving Roku’s revenue expansion. The Amazon DSP partnership continues ramping up. Live sports streaming presents a major opportunity with upcoming events including the U.S. midterms, FIFA World Cup, and Winter Olympics.
Roku collects a cut of subscription fees for channels purchased through its platform. Strong advertising spending and the ongoing shift from linear TV to streaming support growth.
The company is expanding its product lineup with Ads Manager and subscription services like Frndly, Howdy, and Premium Subscriptions. Jefferies and Wedbush both named Roku a top stock pick for 2026 back in December.
Financial Position Remains Solid
Roku maintains strong financials with a current ratio of 2.74 and more cash than debt on its balance sheet. The stock trades with a beta of 1.99 and is down 23.56% year-to-date despite Friday’s premarket surge.
Three analysts revised their earnings expectations upward following the report. The platform revenue acceleration from 20% to 25% core growth signals momentum heading into 2026. JPMorgan previously named Roku its top pick for the year.
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