Roku(US:ROKU) Benzinga·2025-10-31 16:39Core Viewpoint - Roku Inc. has shown a positive outlook for the fourth quarter, driven by strong third-quarter earnings, improved ad performance, and positive cash flow, indicating a recovery in momentum as it approaches 2026 [1][4]. Financial Performance - Roku's third-quarter revenue reached $1.21 billion, a 14% increase, surpassing the guidance of $1.205 billion [5]. - Platform revenue grew by 17%, primarily due to enhanced ad performance, although it fell short of investor expectations of 19-20% [2][5]. - The company achieved positive GAAP operating income for the first time since 2021 and generated $125 million in free cash flow, exceeding the analyst's estimate of $75 million [5]. Future Guidance - Roku raised its fourth-quarter adjusted EBITDA guidance from $131 million to $145 million and increased its platform growth outlook from 12.5% to 15% [6]. - The device revenue forecast was improved to roughly flat year-over-year, up from a previous expectation of a 10% decline [6]. Analyst Insights - Analyst Cory Carpenter maintained an Overweight rating on Roku and raised the price target from $105 to $115, indicating confidence in the company's growth trajectory [1][6]. - Carpenter noted that Roku's management expects platform growth to exceed 21% by the end of 2025, suggesting significant upside potential compared to current market estimates [7]. - The connected TV advertising segment is projected to be one of the fastest-growing areas in the ad industry, positioning Roku favorably due to its scale and expanding ad technology ecosystem [7]. Stock Performance - Following the positive outlook and earnings report, Roku's stock price increased by 10.86%, reaching $110.89 [8].