Rosenblatt elevated its rating on Roku Inc. (NASDAQ:ROKU) to Buy from Neutral on Friday, and simultaneously revised its 12-month price target up to $118.00 from $12.00. The upgrade came after a quarter that produced results and guidance ahead of market expectations, and it follows analyst momentum captured in InvestingPro data showing three analysts recently raised their earnings forecasts for the company, with price targets ranging from $75 to $160.
The research firm pointed to Roku's performance in the fourth quarter of 2025 as the primary backdrop for the upgrade. Roku reported results that topped analyst estimates and issued guidance for the first quarter of 2026 and the full-year 2026 that exceeded market forecasts. Underpinning that outlook is revenue growth: the company has recorded 16.6% revenue growth over the last twelve months.
Rosenblatt emphasized valuation dynamics as a supporting argument. The firm described Roku's current enterprise value to EBITDA multiple as roughly 16x and characterized that level as undervalued given an internal projection of a 46% compound annual growth rate in EBITDA from 2025 through 2027. By contrast, InvestingPro data flags a current EV/EBITDA of 60.1x, which the data service interprets as indicating analysts collectively expect substantial EBITDA improvement.
The report also highlighted Roku’s cash flow and balance sheet profile. Rosenblatt noted that Roku's free cash flow exceeds its EBITDA, and the company holds no debt while maintaining $2.3 billion in cash and investments. That cash position supports an InvestingPro tip noting that Roku has more cash than debt on the balance sheet.
On market position and monetization, the research firm pointed to Roku’s significant footprint in the U.S. streaming ecosystem, where it said half of all TV streaming traffic flows through Roku devices. Rosenblatt called attention to several near-term growth drivers: new monetization capabilities through Amazon, a fresh advertising product aimed at small and medium-sized businesses, redesigned front-page features geared toward more advanced advertising, and broadly rising streaming engagement trends.
Roku’s fourth-quarter financials reinforced the picture. The company reported earnings per share of $0.53, substantially above an expected $0.27, producing a 96.3% earnings surprise. Platform revenue rose 18%, topping investor expectations of roughly 17%.
JPMorgan, cited in coverage of the company’s results, indicated that core growth accelerated from 20% in the third quarter to 25% in the fourth quarter when excluding certain factors such as political advertising. JPMorgan retained an Overweight rating on Roku and keeps a $125.00 price target, citing accelerating platform revenue growth as a central rationale.
Despite those results and multiple favorable analyst moves, Roku's shares moved lower in after-hours trading following the release. The decline was noted as potentially reflecting broader market trends or profit-taking by investors rather than the company’s reported metrics.
Taken together, the analyst upgrade, raised targets and strong quarterly performance present a consistent narrative of improving platform economics and multiple monetization initiatives. At the same time, market price action and differing valuation metrics reflect that investors and data providers may be interpreting the pace and sustainability of that improvement differently.