Roku Surges on Strong Earnings: Analysts Predict Further Gains

Last updated: May 2, 2026 2:59 am

2 weeks ago

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Roku experienced a significant stock surge following a strong first-quarter earnings report, with analysts from Morgan Stanley and Bank of America raising their price targets. The company exceeded expectations in both revenue and adjusted EBITDA, signaling positive momentum in the streaming industry. Analysts predict further gains for Roku, citing increased spending on sports, strategic partnerships, and a favorable advertising landscape.

Roku Surges on Strong Earnings: Analysts Predict Further Gains

Roku rallied as much as 9% Friday following its first-quarter earnings report on Thursday, and the provider of streamed entertainment still has more room to run, according to leading analysts on Wall Street. Roku continues to strengthen its businesses and is benefiting from broader industry tailwinds, they said.

Morgan Stanley reiterated its overweight rating on Roku, while Bank of America maintained its buy rating. Both investment banks hiked their price target on Roku shares to $150, implying 29% upside from Thursday's close.

Roku reported revenue of $1.25 billion in the March quarter, 22% more than the same period a year ago and beating the $1.2 billion expected by analysts surveyed by FactSet. Silicon Valley-based Roku also posted $148.4 million in adjusted earnings before interest, taxes, depreciation and amortization, above analysts' consensus estimate of $131.3 million.

The Roku forecast for second-quarter adjusted EBITDA, revenue and gross profit was also above analysts' expectations. "Roku continues to inflect," Morgan Stanley analyst Sean Diffley said Friday in a note to clients. "The 1Q beat and conservative FY26 raise leave room for upside, with Political a tailwind in [the second half of the year]," he said, referencing midterm election-related political advertising on TV.

Roku shares, at a 52-week Friday, are ahead 28% in the past month but are still trading at roughly a quarter of their all-time high level reached 2021. ROKU YTD mountain Roku shares are up 12% since the beginning of the year.

The streaming platform is pursuing a multi-faceted strategy to edge out competitors in the streaming wars amid a continued rise in cord cutting. Roku, with a market capitalization above $17 billion, has increased its spending on sports, according to Morgan Stanley. In addition, it has secured demand-side partnerships with Trade Desk as well as Amazon and Google 's advertising arms over the past few years, enabling it to boost ad revenue.

"We expect U.S. [connected TV] ad growth to re-accelerate to roughly 20% in 2026, supported by expanding sports and political budgets, higher streaming ad loads and continued migration from linear TV," Diffley wrote.

Bank of America analyst Brent Navon said Roku's recent business moves, alongside streaming industry tailwinds, are likely to set the stage for the stock to continue to move higher. "Roku has notable scope to keep expanding its top and bottom line," Navon said Friday in a note to clients.