Roku, Inc. (ROKU): Among the Best Streaming Service Stocks to Buy According to Analysts

Roku, Inc. (ROKU) has been making waves in the streaming service industry, and analysts are taking notice. With a strong performance in 2024 and an even more promising outlook for 2025, Roku is one of the best streaming service stocks to buy according to analysts. Let's dive into the reasons behind Roku's strong analyst ratings and price targets.

Roku's Impressive 2024 Performance

In 2024, Roku, Inc. reported revenue of $4.11 billion, an increase of 18.03% compared to the previous year. This growth was driven by robust subscriber growth and strong advertising sales. The company also reported a significant decrease in losses, with a 81.77% improvement compared to 2023. These impressive financial results have contributed to Roku's strong analyst ratings and price targets.

Analyst Ratings and Price Targets

According to 23 analysts, the average rating for ROKU stock is "Buy." The 12-month stock price forecast is $92.86, which is a decrease of -8.20% from the latest price. However, it is essential to note that the average target predicts a decrease of -6.27% from the current stock price of 99.07. This discrepancy highlights the importance of considering individual analyst price targets rather than relying solely on the average target.

Key Factors Driving Roku's Strong Analyst Ratings

Several key factors contribute to Roku's strong analyst ratings and price targets:

1. Revenue Growth: Roku's consistent revenue growth, driven by robust subscriber growth and strong advertising sales, has attracted analysts' attention. In 2024, Roku's revenue increased by 18.03% compared to the previous year.
2. Expansion of Ad Reach: Roku has been expanding its advertising reach, which has led analysts to raise their price targets. The company's ad business is expected to grow as it gains more market share in the connected TV advertising space.
3. Platform Revenue Milestone: Roku crossed the $1 billion threshold in platform revenue in Q4 2024, further solidifying its position in the streaming market. This achievement has contributed to the company's strong analyst ratings.
4. Profitability Outlook: Roku expects to be profitable in 2026, which has boosted investor confidence and contributed to the company's strong analyst ratings.
5. Increased Streaming Households: Roku added more than 4 million new streaming households in Q4 2024, reaching just shy of 90 million streaming households. This growth in user base has positively impacted the company's stock price and analyst ratings.

Roku's Stock Price Prediction

Roku's stock price prediction for the next few months and years is positive, with analysts forecasting an average target of $92.86. However, it is essential to consider individual analyst price targets, as the average target may not accurately reflect the stock's potential. Some analysts have raised their price targets for Roku stock, citing the company's strong platform growth and expanding ad reach.

Conclusion

Roku, Inc. (ROKU) is one of the best streaming service stocks to buy according to analysts, thanks to its impressive 2024 performance, strong analyst ratings, and positive stock price predictions. The company's consistent revenue growth, expansion of ad reach, platform revenue milestone, profitability outlook, and increased streaming households have all contributed to Roku's strong analyst ratings and price targets. As Roku continues to grow and expand its market share, investors can expect the company to remain a top pick among streaming service stocks.