Roku Inc

Roku closed at $157.45, up 1.63% from the previous session, outperforming a 0.48% loss for the S&P 500, a 0.29% drop in the Dow, and a 0.56% decline in the Nasdaq. Ahead of its upcoming earnings release, the company is predicted to post an EPS of $0.55, a 243.75% increase from the year-ago quarter, while the Zacks Consensus Estimate projects revenue of $1.41 billion, up 16.49%. For the full year, consensus estimates anticipate earnings of $2.78 per share and revenue of $5.61 billion, representing shifts of +371.19% and +18.34%, respectively. The Zacks Consensus EPS estimate has moved 0.9% higher over the past month, and Roku currently carries a Zacks Rank of #1 (Strong Buy). The stock trades at a Forward P/E of 55.75, a premium to its industry's Forward P/E of 11.11.

Fox Corporation's planned acquisition of Roku for $22 billion underscores the strategic value of owning TV operating systems and streaming platforms, according to new research from Parks Associates. The firm's Tech Ecosystem Dashboard, based on surveys of over 8,000 US internet households, finds that 43% report a Roku device as their most-used streaming media player, and among smart TV owners, 17% say their primary TV runs on Roku OS. The deal would combine Fox's premium live content, including sports and news, and its ad-supported service Tubi with Roku's operating system, The Roku Channel, and advertising capabilities, giving the combined company two major FAST properties. Roku reaches more than 100 million streaming households globally, and Parks Associates research director Michael Goodman notes that the platform's influence extends beyond any single hardware brand, positioning the combined entity to better control content discovery, viewer data, and advertising.

Roku, Inc. announced on June 15th that it will be acquired by Fox Corp, with each Roku share receiving $96 in cash and 0.9693 shares of FOXA. RGA Investment Advisors, which first bought Roku in late 2018, disclosed the deal in its second-quarter 2026 investor letter, noting it is likely to hold the FOXA shares upon closing due to enthusiasm around Roku's growth acceleration and revenue synergies. Roku closed at $158.18 per share on August 24, 2026, with a market capitalization of $23.48 billion, a one-month return of 9.92%, and a 65.53% gain over the past 52 weeks.

Zacks Investment Research highlights three non-tech Nasdaq-listed stocks with strong growth prospects for 2026. Interactive Brokers Group is expected to grow revenue and earnings by 18% and 22.8% respectively this year, with its consensus earnings estimate up 1.9% over the last 30 days. Roku's advertising revenue rose 24.8% year over year to $672.8 million in the second quarter of 2026, and its earnings estimate has improved 13.6% over the last month. BrightSpring Health Services is projected to grow revenue by 18.2% and earnings by 82% in 2026, with its earnings estimate up 8.3% over the last 30 days.

The Q2 earnings season for consumer subscription stocks showed mixed results, with Netflix reporting revenues of $12.56 billion, up 13.4% year over year, in line with analyst expectations but delivering the weakest full-year guidance update of the group. Roku outperformed with revenues of $1.35 billion, up 21.9% year over year, beating analyst expectations by 4.4%, while Bumble reported revenues of $210.5 million, down 15.2% year over year, and Chegg reported revenues of $51.85 million, down 50.7% year over year. Duolingo reported revenues of $298.5 million, up 18.3% year over year, surpassing analyst expectations by 0.9%. On average, share prices of the seven tracked consumer subscription stocks are down 2.6% since the latest earnings results.

Fox Corp. was upgraded to Overweight from Neutral by J.P. Morgan and Wells Fargo, which also raised their price targets, citing stronger earnings prospects, robust advertising trends and the pending acquisition of Roku. J.P. Morgan raised its price target to $82 from $70, while Wells Fargo lifted its target to $80 from $65. J.P. Morgan raised its fiscal 2027 and 2028 adjusted EBITDA estimates by 7% and 9%, respectively, following the company's fourth-quarter results. The brokerage cited strong FIFA World Cup economics, an upbeat political advertising outlook, continued advertising momentum and better distribution revenue. The outlook was supported by strong performance in Fox's television business and Tubi. J.P. Morgan said fourth-quarter television revenue rose 45% year over year to $2.48 billion, while segment EBITDA jumped 129% to $705 million. Tubi revenue increased 35%, helped by a 17% rise in viewing time, with the platform ending fiscal 2026 with 110 million monthly active users. J.P. Morgan expects another boost from the 2026 FIFA World Cup and a record political advertising cycle. It raised its fiscal 2027 television EBITDA estimate by 30% to $1.49 billion and said Fox's decision not to renegotiate its existing NFL media rights deal early removes a major near-term overhang. Wells Fargo also raised its fiscal 2027 EBITDA estimate to $4.12 billion from $3.85 billion and expects World Cup revenue of about $800 million, compared with its previous estimate of more than $600 million. It raised its fiscal 2027 television segment EBITDA estimate to $1.6 billion from $1.3 billion, citing stronger political advertising, World Cup revenue and digital investments. The planned Roku acquisition is another key part of the bullish outlook. J.P. Morgan said combining Tubi with Roku's streaming platform would create the largest free ad-supported streaming television operator and improve Fox's growth profile. The brokerage also sees significant potential for Fox to leverage its advertising expertise across Roku's more than 100 million streaming households. Wells Fargo estimates the deal could generate about $300 million in advertising revenue synergies within roughly two years, driven by higher pricing and fill rates on Roku Channel inventory, homescreen advertising and improved monetization of third-party streaming inventory. J.P. Morgan said Fox's pro forma valuation remains below the level implied by its $82 price target, leaving room for a rerating as investors increasingly view the combined company as a scaled connected-TV platform with first-party data and greater advertising opportunities.

Roku has launched Fairground AI, the first all-AI free streaming channel on a major platform, testing whether near-zero-cost programming can sustain an ad-supported audience at scale. The channel, built on AI-generated films, shorts, and ads, comes from startup Fairground and runs continuously with no fixed schedule. Roku's stock is now trading near the $160-per-share takeover price offered by Fox in a deal valuing the company at roughly $22 billion, with analysts at Seaport Research and Guggenheim downgrading the stock to Neutral. Roku's second-quarter revenue rose 22% year over year to $1.35 billion, platform revenue climbed 25% to $1.22 billion, and net income hit a record $164.2 million. The Fairground launch signals a potential structural shift in streaming, where AI-generated content and ads could threaten studios like Netflix and Disney while benefiting ad-supported platforms.

Fox Corporation reported record fiscal 2026 financial results with annual revenue reaching $17.1 billion, a 5% increase driven by record advertising and distribution revenue, while adjusted EBITDA rose 8% to $3.9 billion. Fourth-quarter revenue surged 28% to $4.2 billion, fueled by the broadcast of the 2026 FIFA Men's World Cup, which helped push quarterly advertising revenue up 78% to $1.9 billion. Tubi, the company's free ad-supported streaming service, grew fourth-quarter revenue by 35% and reached 110 million monthly active users, while the newly launched FOX One streaming service saw minimal cannibalization of the traditional pay-TV business and churn rates below expectations. The company also announced a semiannual dividend increase to $0.29 per share and repurchased $2 billion in shares during the fiscal year, with management indicating the buyback program will continue through the pending acquisition of Roku, which is expected to close in the first half of calendar 2027 at a net leverage of 2.8 times.

Roku holds an edge over Netflix in the ad-supported streaming race, according to a Zacks Investment Research analysis. Roku’s first-quarter 2026 Platform revenues rose 28% year over year to $1.13 billion, with advertising up 27% and subscription revenues up 30%, and the company raised its full-year adjusted EBITDA guidance to $675 million. Netflix posted second-quarter 2026 revenues of $12.6 billion, up 13%, and expects ad revenues to roughly double to approximately $3 billion in 2026, but its live programming consumes more than 5% of content spend while driving only about 1% of total viewing hours. Roku trades at a forward price-to-sales ratio of 3.54X, below Netflix’s 5.51X, and its shares have returned 32.6% year to date, sharply outperforming Netflix’s 22.8% decline. Both stocks carry a Zacks Rank #3 (Hold).

Netflix and Roku delivered contrasting post-earnings snapshots, with Netflix posting 33.4% operating margins and a record buyback quarter while Roku's platform revenue surged 28% year-over-year. Netflix reported earnings per share of $0.80 on revenue of $12.559 billion, growing 13.37% year-over-year, and highlighted a remaining $27.1 billion buyback authorization. Roku's platform revenue reached $1.13 billion, driven by a 27% increase in advertising and a 30% jump in subscriptions, though its devices segment slipped 16%. Netflix is expanding its NFL package and creator deals to own screen time, while Roku is integrating with major demand-side platforms and saw its advertiser count more than double. The next test for Netflix is reaching its $3 billion ad revenue target, while Roku's Q2 earnings on July 30 will be closely watched, with Polymarket traders giving an 87% chance of a beat.

The streaming-content industry is moving beyond pure subscription models toward advertising, live sports, and creator-led video, benefiting Alphabet, Amazon, and Fox. Streaming captured a record 47.5% of U.S. television use in December 2025 and 46.6% of ad-supported TV viewing in the first quarter of 2026, according to Nielsen. Alphabet's YouTube held 13.4% of total U.S. television watch time in April 2026, the largest share among measured media distributors, while Amazon's Prime Video represented 4.2% and Fox's Tubi reached a platform-best 2.3%. Fox also announced a planned acquisition of Roku in June 2026, projecting roughly $400 million in annualized cost synergies, though the deal requires approvals and is expected to close in the first half of 2027.

Roku is navigating a pending acquisition by Fox Corp for nearly $22 billion while maintaining a dominant streaming platform, whereas Sirius XM is leveraging a new advertising partnership with Alphabet to diversify revenue beyond satellite subscriptions. Roku's fiscal 2025 revenue reached nearly $4.7 billion, up approximately 15.2% from the prior year, with net income of $88.4 million and free cash flow of nearly $478.4 million. Sirius XM reported fiscal 2025 revenue of roughly $8.6 billion, a slight decline of about 1.6%, but achieved net income of nearly $805 million and free cash flow of nearly $1.2 billion. The pending Fox acquisition offers Roku shareholders $96 in cash plus 0.9693 shares of Fox Class A stock per Roku share, creating potential upside from the price spread. Sirius XM trades at a lower forward P/E of 9.7x and P/S ratio of 1.2x, with an attractive dividend yield of about 3.5% and low subscriber churn.

Wolfe Research upgraded Fox Corp. to Outperform from Peer Perform with a $71 price target, arguing the planned merger with Roku will double Fox's long-term sales growth rate. Analyst Peter Supino said the combined entity would create a connected TV and streaming unit accounting for roughly 45% of pro forma TV engagement and about one-third of pro forma revenue. Fox shares have fallen 23% from pre-merger levels and trade at 11.8 times next-twelve-month pro forma unlevered free cash flow, a discount Wolfe expects to narrow as selling abates and new shareholders assess the outlook. The $71 target is based on 13 times estimated pro forma 2028 unlevered free cash flow of $3.6 billion.

Fox Corp. announced a $22 billion cash-and-stock deal to acquire Roku at $160 per share, a 33.7% premium, but both Fox and Netflix shares fell as investors questioned the price and debt load. Fox's stock dropped 16.8% on the announcement day and continued to decline, with the company taking on $12 billion in new debt to fund the cash portion, raising concerns about leverage despite promised cost synergies. Netflix, which conducted preliminary due diligence but did not make a formal bid, saw its stock fall amid M&A anxiety and a perceived shift away from organic growth. The deal would give Fox access to over 100 million streaming households and Roku's advertising infrastructure, with Roku founder Anthony Wood joining Fox's board upon closing in the first half of 2027.

Analysts have lifted their fair value estimate for Roku to US$151.68 per share from US$146.04, moving closer to the US$160 per share price in Fox Corporation's agreed US$22 billion acquisition. Several firms, including Seaport Research, Loop Capital, Wedbush, and Jefferies, now value Roku in the US$155 to US$160 range, while Rosenblatt and Evercore ISI have aligned targets with the US$160 offer. A number of banks, including JPMorgan, Piper Sandler, and KeyBanc, have downgraded Roku following the deal, and BofA moved to No Rating, stating the stock is no longer trading on fundamentals. The updated fair value reflects modest adjustments in analyst models, with revenue growth assumptions edging up to about 13.39%, net profit margin to about 11.56%, and the forward P/E multiple to about 34.44 times.

The Zacks Broadcast Radio and Television industry faces mounting cord-cutting and macroeconomic pressures, but Netflix, Fox, Roku, and Sirius XM are positioned to benefit from surging digital content demand. The industry carries a Zacks Industry Rank of 164, placing it in the bottom 34% of over 250 Zacks industries, with aggregate 2026 earnings estimates down 6.3% since June 30, 2025. Fox, a Zacks Rank #1 (Strong Buy), saw its fiscal 2026 consensus earnings estimate rise 7.6% to $4.93 per share over the past 60 days, supported by a new NFL package in Mexico and a planned acquisition of Roku targeting roughly $400 million in run-rate cost synergies. Netflix, a Zacks Rank #3 (Hold), guided for 2026 revenues of $50.7 billion to $51.7 billion and operating margin expansion to 31.5%, with its ad-supported tier reaching over 250 million global monthly active viewers and ad revenues on track to roughly double to about $3 billion. Roku, also a Zacks Rank #3, surpassed 100 million global streaming households and raised full-year guidance to platform revenue growth near 21% to $5 billion, while its merger agreement with Fox adds a near-term catalyst. Sirius XM, another Zacks Rank #3, reaffirmed full-year guidance of roughly $8.5 billion in revenues and $2.6 billion in adjusted EBITDA, with free cash flow tripling year over year in the first quarter and churn falling to a record-low 1.5%.

Jim Cramer expressed strong support for Fox News’ announced $22 billion acquisition of Roku, calling himself a big believer in the deal. Roku shares surged 20% on June 12th when news of the acquisition broke, contributing to a 70.5% gain over the past year and a 27% rise year-to-date. The company reported $1.13 billion in revenue on May 1st and raised its full-year outlook, while Guggenheim raised its price target to $130 from $115 with a Buy rating on April 21st, citing strategic evolution and user growth. Cramer referenced a conference call exchange between analyst Richard Greenfield and Roku CEO Anthony Wood, dismissing any implication of trouble at the company.

Significant mergers and acquisitions are reshaping Hollywood in the first half of 2026, according to Tom Ara, head of Weil, Gotshal & Manges Entertainment, Sport & Media practice. Key deals include Fox's $22 billion investment in Roku and Paramount's $110 billion acquisition of Warner Brothers Discovery. Ara notes the market has shifted from a cautious stance last year to a more confident environment, driving increased capital deployment and ongoing consolidation in the entertainment sector. He spoke with Romaine Bostick and Katie Greifeld on "The Close."

Fox has agreed to acquire Roku in a cash-and-stock deal valuing Roku at $160 per share, or $22 billion based on Fox's 10-day volume-weighted average share price as of June 10, with closing expected in the first half of 2027. The combined entity will reach 100 million households through Roku's smart-TV platform, giving Fox a massive distribution edge and potentially reducing visibility for Disney's content on a platform that was previously neutral. Fox will also strengthen its free ad-supported streaming position by owning both Tubi and The Roku Channel, which could force Disney to share more advertising economics for better placement of its ad-based Disney+ and Hulu tiers. Despite the increased competition, Disney's wide economic moat rests on its unique intellectual property—characters, stories, and franchises that cannot be replicated—which should help it maintain momentum.

Netflix remains one of the best falling stocks to invest in, according to analysts, even after failing to acquire Roku and Warner Bros. On June 16, Netflix stock declined amid reports that the streaming giant had aggressively pursued Roku but lost a bidding war to Fox, which offered $160 per share in a cash-and-stock deal. This marks the second setback for Netflix, which had also failed in its pursuit of Warner Bros. The failed bids highlight Netflix's shift toward pursuing growth through mergers and acquisitions, particularly to gain access to first-party ad data and strengthen its advertising prospects, rather than relying solely on organic growth. Netflix operates a global streaming service with over 310 million paid memberships across thousands of internet-connected devices.

Cathie Wood's ARK Invest sold nearly $60 million worth of Robinhood and Roku shares on June 18, locking in profits after both stocks surged on separate catalysts. The firm sold 275,572 Robinhood shares worth $26.65 million through the ARK Innovation ETF, following the company's announcement of a 10% workforce reduction that lifted the stock. ARK also sold 239,267 Roku shares worth about $33.01 million across three ETFs after Fox agreed to acquire Roku in a $22 billion deal at $160 per share, pushing the stock near the takeover price and reducing further upside. The proceeds were rotated into new positions, including $46.18 million in Eli Lilly shares through the ARK Genomic Revolution ETF after the drugmaker acquired 4E Therapeutics, and $18.92 million in Coinbase shares as the company expands beyond crypto trading. ARK also bought $17.68 million of Block shares and smaller biotech positions, while Tesla remained the ARK Innovation ETF's largest holding at 9.50%.

Fox Corp stock fell 24.9% this week after the company announced it will acquire Roku in a cash-and-stock deal valued at $22 billion. The transaction, which accounts for Roku's net cash, will be funded 60% in cash through new debt and equity issuance, diluting existing shareholders. The companies aim to combine Roku's 100 million active users and advertising technology with Fox's live sports and Tubi streaming platform to boost ad revenue. Investor skepticism over the debt and dilution drove the sell-off, though some analysts see long-term potential in the merged advertising capabilities.