Roku, Inc. (NASDAQ: ROKU) has faced a turbulent journey since its pandemic-era highs, leaving investors questioning whether the streaming platform remains a compelling buy for the long term.
Despite recent headwinds—including negative earnings, slowing sales growth, and fierce competition—Roku’s underlying fundamentals and strategic positioning suggest the stock deserves a closer look from patient, growth-oriented investors.
Roku’s financial performance in 2025 presents a nuanced picture. The company reported first-quarter revenue of $1.02 billion, up 15.8% year-over-year, and an earnings per share loss of $0.19, which beat analyst expectations.
While Roku continues to post negative GAAP earnings, much of this is a result of its deliberate strategy to sell hardware at a loss to maximize user growth and market penetration. This approach has kept free cash flow positive and supports ongoing platform expansion, even as net income remains in the red.
Sales growth has moderated from the explosive gains seen during the pandemic, now averaging around 14–17% annually. This slowdown reflects both a normalization of streaming demand and intensified competition from tech giants like Amazon and Apple.
However, Roku’s platform revenue—a key driver of long-term value—rose 17% in the most recent quarter, buoyed by record streaming hours and continued leadership as the top TV operating system in the U.S., Canada, and Mexico.
The company’s user base has climbed to over 90 million streaming households globally, underscoring its entrenched position in the rapidly evolving connected TV landscape.
Valuation remains a sticking point for some investors, with Roku trading at a premium on cash flow and forward earnings metrics. Yet, alternative measures such as price-to-sales and price-to-book ratios reveal a more reasonable picture, especially given the company’s robust balance sheet and improving operational efficiency. Wall Street sentiment has turned cautiously optimistic, with analysts raising price targets and forecasting a return to profitability by 2026.
For long-term investors, Roku’s strengths lie in its scale, innovation, and ability to adapt to shifting industry trends. The company’s focus on programmatic advertising, international expansion, and new product launches positions it to capture further upside as digital streaming continues to displace traditional media.
While volatility and competitive risks persist, Roku’s current base-building phase may offer an attractive entry point for those seeking exposure to the future of television and digital advertising. As the sector evolves, Roku remains a stock to watch—and potentially accumulate—for the next wave of streaming growth.
