Roku (ROKU) Stock Forecast & Price Target

Roku is supported by accelerating monetization, as 2Q26 total net revenue rose 22% year over year to $1,354.7M and Platform revenue grew 25% to $1,221.0M, driven by 25% advertising growth and 26% subscription growth. Its core operating leverage is improving, with record net income of $164.2M, Adjusted EBITDA of $254.3M, and TTM free cash flow of $704.1M, while gross profit jumped 35% and gross margin expanded to 49.7%. The outlook is also underpinned by strategic durability: Roku reaches more than half of U.S. broadband households, streaming hours totaled 37.9B, and the lower-memory-footprint Roku TV OS, expanding OEM licensing, AI-powered search, and The Roku Channel should deepen engagement and support future growth.

Roku is facing a fundamentally challenged outlook because its monetization depends on advertising, subscriptions, and device sales in a market exposed to recessionary demand risk, cord-cutting volatility, and intensifying competition that can dilute streaming economics. Although gross profit reached $2,450M and platform gross margin held at the high end of 51%–52%, device gross margin is expected to deteriorate to (28)%–(29)% for full-year 2026 as second-half memory costs rise, while sales and marketing expense should increase as shipments ramp. Political advertising strength in Q2 and the Roku Channel’s scale are supportive, but persistent execution risk, high interest rates, and dual-class control leave less room for cash flow improvement or valuation support if user engagement and ad pricing soften.