Core Insights - The streaming video platform has achieved its first profitable year since 2021, driven by investments in digital advertising [1] Group 1 - The company has successfully transitioned to profitability, marking a significant milestone after two years of losses [1] - Digital advertising investments have played a crucial role in enhancing the platform's revenue streams [1]

Roku, Inc. (NASDAQ:ROKU) ranks among billionaire Stanley Druckenmiller’s 10 best stock picks. On February 13, Evercore ISI boosted Roku, Inc. (NASDAQ:ROKU)’s price target to $150 from $145 while keeping an Outperform rating following the company’s fourth-quarter results announcement. The streaming company posted what Evercore deemed a “clean beat and raise” quarter, with quarterly revenue and EBITDA surpassing street estimates by 3% and 17%, respectively. Even with a 10-percentage-point harsher compariso ...

Core Insights - Zacks Premium offers tools for investors to enhance their stock market strategies and confidence, including daily updates, research reports, and stock screens [1] Zacks Style Scores - Zacks Style Scores provide a rating system for stocks based on value, growth, and momentum, helping investors identify securities likely to outperform the market in the short term [2] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [3] Value Score - The Value Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales, aiming to find attractive investment opportunities [3] Growth Score - The Growth Score assesses a company's future prospects by analyzing projected and historical earnings, sales, and cash flow to identify stocks with sustainable growth potential [4] Momentum Score - The Momentum Score identifies trends in stock prices and earnings outlooks, helping investors time their positions based on recent price changes and earnings estimate revisions [5] VGM Score - The VGM Score combines the Value, Growth, and Momentum Scores, providing a comprehensive indicator for investors who utilize multiple investment strategies [6] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.86% since 1988, outperforming the S&P 500 [7] - There are typically over 800 stocks rated 1 or 2, making it essential for investors to utilize Style Scores to narrow down their choices [8] Stock to Watch: Roku - Roku is a leading TV streaming platform in North America, currently rated 1 (Strong Buy) with a VGM Score of B and a Growth Style Score of A, indicating a projected year-over-year earnings growth of 255.9% for the current fiscal year [11] - Recent upward revisions from eight analysts have increased Roku's earnings estimate for fiscal 2026 by $0.81 to $2.10 per share, with an average earnings surprise of +97.8% [12]

Core Insights - Netflix and Roku are both significant players in the streaming industry, but they serve different roles, with Netflix as a content creator and Roku as a platform for accessing content [2][3]. Group 1: Company Overview - Netflix's stock has decreased by 30% to under $80 per share since a 10-1 stock split in November, aimed at making shares more affordable for employees [1]. - Roku's shares are currently priced around $90, which is more than Netflix but over 20% lower than its 52-week high of $116 [1]. Group 2: Financial Performance - Netflix's annual sales are projected to exceed $50 billion this year, with a 13% increase expected from $45.18 billion in 2025, and a further 12% increase to $57.22 billion in FY27 [4]. - Roku's annual sales are forecasted to grow by 16% in FY26 and another 13% in FY27, reaching $6.22 billion [8]. Group 3: Strategic Moves - Netflix has launched ad-supported subscription plans in nearly 200 countries, boasting over 200 million international subscribers, and is looking to expand further by potentially acquiring Warner Bros. Discovery [5]. - Roku's growth strategy includes advertising partnerships, notably with Amazon, and it controls about 50% of the streaming operating systems market [8]. Group 4: Earnings Projections - Netflix's earnings per share (EPS) are expected to grow by 20% in the foreseeable future, with projections nearing $4.00, although recent revisions for FY26 and FY27 EPS have been modestly lower [9][10]. - Roku's EPS is projected to increase significantly, with FY26 estimates at $2.03, a 244% increase from $0.59 last year, and FY27 EPS expected to rise to $3.20 [14]. Group 5: Valuation and Market Position - Long-term investors may find Netflix attractive at a forward earnings multiple of 24X, compared to Roku's 43X, although Roku's positive EPS revisions suggest short-term upside potential [15]. - Roku currently holds a Zacks Rank 1 (Strong Buy), while Netflix has a Zacks Rank 3 (Hold) [16].

Core Viewpoint - The consumer discretionary sector has shown moderate growth over the past year, but is currently experiencing a negative year-to-date performance, prompting the identification of five stocks with potential for investment despite the sector's recent slump [2][4]. Consumer Discretionary Sector Overview - The consumer discretionary sector is characterized as growth-oriented, with share prices expected to increase over the long term. This sector is sensitive to market interest rate movements and typically exhibits an inverse relationship with them [3]. Interest Rate Impact - The Federal Reserve's recent easy monetary policies, including significant cuts to the benchmark lending rate, have created uncertainty regarding interest rate trajectories for the current year. Additionally, concerns about AI's impact on corporate profits have affected growth-oriented stocks [4]. Selected Stocks for Investment - Five consumer discretionary stocks have been identified for investment based on their favorable Zacks Rank: Ralph Lauren Corp., Roku Inc., Airbnb Inc., FOX Corp., and Carnival Corporation & plc. Each stock carries a Zacks Rank of 1 (Strong Buy) or 2 (Buy), with potential for double-digit price upside in the short term [5]. Ralph Lauren Corp. (RL) - Ralph Lauren has a Zacks Rank of 2 and is benefiting from its "Next Great Chapter: Drive Plan," which emphasizes brand elevation and operational agility. The company expects revenue growth in the high-single to low-double digits for fiscal 2026, with gross margin increasing by 40-80 basis points and operating margin expanding by 100-140 basis points [6][7]. - The expected revenue and earnings growth rates for Ralph Lauren are 11.7% and 30.5%, respectively, for the current year, with a short-term average price target indicating an 11.8% increase from the last closing price of $369.18 [8]. Roku Inc. (ROKU) - Roku holds a Zacks Rank of 1, showcasing strong platform revenue growth driven by innovative advertising and streaming services. The company has achieved significant household penetration and improved profitability through strong free cash flow generation [9][10]. - Roku's expected revenue and earnings growth rates are 15.4% and over 100%, respectively, for the current year, with a short-term average price target suggesting a 35.7% increase from the last closing price of $90.06 [13]. Airbnb Inc. (ABNB) - Airbnb has a Zacks Rank of 2 and is experiencing growth in Nights and Experiences Booked, positively impacting its Gross Booking Value. The company benefits from increasing guest demand and a recovery in cross-border travel [14][15]. - The expected revenue and earnings growth rates for Airbnb are 10.8% and 18.1%, respectively, for the current year, with a short-term average price target indicating a 20.4% increase from the last closing price of $121.35 [16]. FOX Corp. (FOX) - FOX has a Zacks Rank of 1 and produces a variety of content, including news and sports. The expected revenue and earnings growth rates for FOX are -0.9% and -2.3%, respectively, for the current year, but the Zacks Consensus Estimate for earnings has improved by 6.9% over the last 30 days [17]. - The short-term average price target for FOX suggests a 36.1% increase from the last closing price of $51.56 [18]. Carnival Corporation & plc (CCL) - Carnival has a Zacks Rank of 1 and is benefiting from strong demand, increased booking volumes, and a focus on marketing to attract new customers. The company emphasizes the role of digital marketing and AI in enhancing effectiveness [19][20]. - The expected revenue and earnings growth rates for Carnival are 4.6% and 12.9%, respectively, for the current year, with a short-term average price target indicating a 19.1% increase from the last closing price of $31.77 [21].

Roku, Inc. (NASDAQ:ROKU) is among the 11 Best Entertainment Stocks to Buy According to Wall Street. Pivotal Research Raises its Price Target on Roku, Inc. (ROKU) to $140 and Maintains a Buy Rating On February 16, 2026, Pivotal Research raised its price target on Roku, Inc. (NASDAQ:ROKU) to $140 from $135 and maintained a Buy rating, describing the company’s fourth-quarter report as strong and better than expected. The firm also highlighted Roku’s “Switzerland-like positioning” within the streaming ecosys ...

Streaming platform specialist Roku (ROKU) is back in the spotlight, and this time, it’s not hype driving the buzz. It’s hard numbers. The company’s fiscal 2025 fourth-quarter results, released last week, didn’t just top Wall Street’s expectations - it staged a powerful turnaround and provided an optimistic financial outlook. Roku swung from a loss in the year-ago quarter to posting a meaningful profit in Q4, marking a major shift in momentum. Of course, the market has taken notice. Since delivering that ...

Roku (NASDAQ: ROKU) shares soared after the streaming company reported strong Q4 results and issued upbeat guidance. Let's take a closer look at its results and prospects to see whether it's too late to buy the stock. Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue » A strong quarter and upped guidance While Roku is best known for its st ...

Industry Overview - The consumer discretionary sector has experienced moderate growth over the past year, despite a strong rally in U.S. stock markets, and is currently in the negative year-to-date [1] - The sector is growth-oriented, with share prices typically increasing over a long period, but it is sensitive to market interest rate movements [1] Monetary Policy Impact - The Federal Reserve has implemented easy monetary policies with significant cuts in the benchmark lending rate over the last two years, leading to uncertainty about interest rate trajectories this year [2] - Concerns regarding AI-led corporate profits have also impacted growth-oriented stocks [2] Investment Opportunities - Five consumer discretionary stocks have been identified with favorable Zacks Ranks for investment, showing double-digit price upside potential in the short term: Ralph Lauren Corp. (RL), Roku Inc. (ROKU), Airbnb Inc. (ABNB), FOX Corp. (FOX), and Carnival Corporation & plc (CCL) [3][9] - Each selected stock carries either a Zacks Rank 1 (Strong Buy) or 2 (Buy) [3] Ralph Lauren Corp. (RL) - Ralph Lauren has benefited from its "Next Great Chapter: Drive Plan," focusing on brand elevation and operational agility, leading to robust financial performance [6] - The company expects revenues to increase in the high-single to low-double digits for fiscal 2026, with gross margin expected to rise by 40-80 basis points and operating margin by 100-140 basis points [7] - Expected revenue and earnings growth rates for the current year are 11.7% and 30.5%, respectively, with a 5% improvement in the earnings consensus estimate over the last 30 days [8] Roku Inc. (ROKU) - Roku demonstrates strong platform revenue expansion driven by innovative advertising capabilities and a growing distribution of streaming services [11] - The company has achieved substantial household penetration and improved profitability, with expected revenue and earnings growth rates of 15.4% and over 100%, respectively, for the current year [15] - The short-term average price target indicates a potential increase of 35.7% from the last closing price, with a maximum upside of 77.8% [15] Airbnb Inc. (ABNB) - Airbnb is experiencing positive trends in Gross Booking Value due to improvements in Nights and Experiences Booked, driven by increasing guest demand and recovery in cross-border travel [16][17] - The expected revenue and earnings growth rates for the current year are 10.8% and 18.1%, respectively, with a 0.6% improvement in the earnings consensus estimate over the last seven days [18] - The short-term average price target suggests a potential increase of 20.4% from the last closing price, indicating a maximum upside of 64.8% [18] FOX Corp. (FOX) - FOX produces and distributes a variety of content, including news and sports, but has expected revenue and earnings growth rates of -0.9% and -2.3%, respectively, for the current year [19] - The short-term average price target indicates a potential increase of 36.1% from the last closing price, with a maximum upside of 68.7% [20] Carnival Corporation & plc (CCL) - Carnival is benefiting from sustained demand, increased booking volumes, and a focus on marketing to attract new customers [21][22] - The expected revenue and earnings growth rates for the current year are 4.6% and 12.9%, respectively, with a 5.8% improvement in the earnings consensus estimate over the last 60 days [23] - The short-term average price target suggests a potential increase of 19.1% from the last closing price, indicating a maximum upside of 44.8% [23]

Core Viewpoint - Roku's stock experienced a significant increase following its fourth-quarter earnings release, showcasing strong profitability and positive guidance for future growth, despite being down approximately 17% year-to-date [1][2]. Financial Performance - Roku's fourth-quarter revenue rose 16% year over year to about $1.4 billion, driven by an 18% increase in high-margin platform revenue, which constitutes 88% of total revenue [4]. - The company's fourth-quarter net income was approximately $80 million, a turnaround from a loss of $36 million in the same quarter last year, while full-year 2025 net income reached $88 million, up from a $129 million loss in 2024 [6]. Business Momentum - Streaming hours on Roku's platform increased by 15% year over year in 2025, with the Roku Channel growing to represent 6.3% of all TV streaming on its platform in December, up from 4.6% in December 2024 [5]. - Roku's management expects first-quarter platform revenue to grow over 21% year over year, contributing to an overall revenue increase of about 18% for the same period [8]. Profitability Outlook - The company guided for adjusted EBITDA of $130 million in Q1 and $635 million for the full year of 2026, reflecting an increase from $421 million in adjusted EBITDA for 2025 [9]. - Roku anticipates net income for 2026 to reach $325 million, significantly up from $88 million in 2025, indicating strong expectations for profitability improvement [9]. Market Position and Valuation - Despite the positive financial momentum, Roku's shares are trading at over 40 times the management's forecast for full-year earnings in fiscal 2026, raising concerns about the sustainability of such a premium valuation [10]. - The company faces intense competition from larger tech firms, which poses risks to its market leadership and future growth potential [11].