Roku adds four million new streaming households in impressive quarter

In the United States, Roku recently reported significant financial results for its fourth quarter, surpassing Wall Street's expectations. The streaming platform experienced a remarkable turnaround by halving its quarterly losses, resulting in a net loss of $35.5 million or 24 cents per share, compared to a net loss of $78.3 million or 55 cents per share in the same quarter the previous year. The adjusted EBITDA came to $77.5 million, while revenue reached $1.20 billion, exceeding predictions of $34.7 million and $1.15 billion respectively. The favorable results led to a premarket share rally of over 13% on February 14, 2025. Pivotal Research Group and Wells Fargo upgraded Roku’s stock ratings, indicating optimism regarding the company's growth prospects. Pivotal increased its target for Roku's shares to $125 from $65, implying a potential upside of approximately 44%, while Wells Fargo raised its target to $129 from $74, reflecting over 48% upside potential. Analysts at Pivotal believe that the current growth trajectory of Roku is underappreciated, suggesting that the company’s focus on product and scale will help it succeed against much larger competitors in the long term. CEO Anthony Wood highlighted that Roku has now attracted more than 89.8 million streaming households, marking a 12% year-over-year increase. Wood projected that the company is on track to reach 100 million streaming households within the next year. The quarterly performance was also driven by an 18% increase in streaming hours and a continued emphasis on growing advertising revenue through deeper integrations with third-party platforms. Additionally, Wood pointed out the relevance of political advertising in the upcoming midterm and presidential elections, estimating that Roku’s political revenues could exceed $200 million in 2026. Roku's strategic focus on advertising-based video on demand and home screen innovation positions it favorably for future growth. Despite the upgrades and positive sentiment, some analysts remain cautious. Out of the 34 analysts who cover Roku, 17 maintain a hold rating, while 14 have either a strong buy or buy rating. Over the previous year, Roku shares have declined by almost 5%, contrasting sharply with the S&P 500's gain of over 22%. Overall, the strong quarterly earnings, growth in streaming households, and upgrades from major financial institutions have set a positive tone for Roku's outlook in 2025.