Can ROKU's Rising Streaming Hours Drive Further Upside in Revenues?

Core Insights - Roku's increasing streaming hours solidify its role as a key monetization platform in the connected television ecosystem, with higher usage directly enhancing advertising inventory and subscription discoverability [1][4] Streaming Growth Drivers - Content expansion is crucial for streaming-hour growth, with Roku enhancing its FAST channel lineup featuring popular shows like The First 48, Shark Tank, NYPD Blue, and Law & Order, which has become the first FAST channel dedicated to a series within the Dick Wolf Universe [2] - Roku Originals, such as Honest Renovations, have been renewed for a fourth season due to strong audience traction, while upcoming titles like NFL Hometown Eats are expected to further engage viewers, particularly in live sports [2] Advertising Engine Strengthening - Increased streaming hours are bolstering Roku's advertising capabilities by expanding premium inventory and improving access for advertisers, with deeper integrations with Amazon DSP and Trade Desk broadening advertiser reach [3] - Roku Ads Manager is attracting small and medium-sized businesses, and collaboration with DoubleVerify has enhanced platform trust by blocking billions of fraudulent ad requests [3] Financial Performance and Estimates - In Q3 2025, Roku generated 36.5 billion streaming hours, an increase of 4.5 billion hours year over year, indicating continued growth in platform engagement [4] - The Zacks Consensus Estimate for Q4 2025 streaming hours is 38.72 billion, reflecting a year-over-year growth of 13.55%, with streaming-hour growth expected to drive platform revenues [4][8] Competitive Landscape - Netflix leads in global streaming hours through premium originals but primarily monetizes through subscriptions, while Roku benefits from direct ad inventory expansion linked to viewing time [5] - Amazon, via Fire TV, also focuses on streaming hours but Roku maintains an advantage in the U.S. market due to its platform economics [5] Share Price and Valuation - Roku shares have increased by 32.7% over the past six months, outperforming the Zacks Broadcast Radio and Television industry's decline of 8.1% and the Zacks Consumer Discretionary sector's drop of 3.5% [6] - Roku's stock is currently trading at a forward 12-month Price/Sales ratio of 3.05X, compared to the industry's 4.3X, indicating a relatively favorable valuation [9] Earnings Estimates - The Zacks Consensus Estimate for Roku's Q4 2025 earnings is 28 cents per share, an improvement from a loss of 24 cents per share in the same quarter last year [11]