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● AI Equity Research · Communication Services

Roku, Inc. (ROKU)

AI stock analysis · Entertainment · Last analyzed Aug 20, 2026

Compass Score
3.0/5
Call
Hold
Price
$156.80
AI Target
$162.45 +3.6%
AI Analyst Summary

Roku's primary bull thesis centers on a dramatic profitability inflection — 1,442.9% YoY EPS growth — driven by aggressive cost discipline and scaling operating leverage on its streaming platform, while top-line revenue grows at a healthy 21.9% YoY. A PEG ratio of 0.90 signals the market is not yet fully pricing in the growth trajectory, and four consecutive EPS beats demonstrate consistent management execution. The key risk is that the elevated trailing P/E of 66.7x leaves little margin for error, making the stock highly vulnerable to any deceleration in platform monetization or ad spending.

Catalysts
Fundamentals
Pe Trailing P/E 66.7x / Forward P/E 40.0x · 2.0/5
Trailing P/E of 66.7x is elevated relative to the Communication Services sector median. The forward P/E of 40.0x reflects expected improvement, but valuation remains stretched and demands sustained execution to justify the premium.
Peg PEG Ratio: 0.90 · 5.0/5
PEG of 0.90 is well below 1.0, a strong positive signal indicating the growth rate more than justifies the current valuation. This is the most compelling valuation metric for ROKU at present.
Analyst Rating Hold consensus (2.5) · 3.0/5
Consensus rating of 2.5 maps to the upper boundary of Buy/Hold territory. The breakdown of 7 Buy and 19 Hold with no Sell ratings reflects cautious optimism — analysts see limited near-term downside but are not broadly convicted on upside.
Earnings Trend EPS Growth YoY: +1,442.9% | Revenue Growth YoY: +21.9% · 5.0/5
The 1,442.9% YoY earnings growth is exceptional, reflecting a dramatic profitability inflection from a low base. Revenue growth of 21.9% confirms top-line momentum is healthy and durable. The magnitude of earnings improvement signals meaningful operating leverage is taking hold.
Price Target Beat EPS Beat Rate: 4 of 4 quarters · 5.0/5
A perfect 4-of-4 EPS beat rate over the last four quarters demonstrates consistent execution against expectations. While the 8-quarter history is incomplete, the recent trend is unambiguously positive and earns the highest score available given the data window.
Management Strong execution signal · 4.0/5
Four consecutive EPS beats, dramatic margin expansion, and a profitability inflection collectively indicate disciplined cost management and effective capital allocation. Analyst conviction remains moderate (no Sell ratings), supporting a constructive but not fully de-risked management view.
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