Roku vs. Netflix: Which Streaming Platform Stock is a Better Buy Now?

Core Insights - The streaming revolution has significantly changed consumer access to entertainment, with Roku and Netflix being major beneficiaries of the shift from traditional cable television [1] - Both companies are experiencing growth due to expanding user bases, increased streaming hours, and strategies aimed at enhancing user engagement [2] Roku's Position - Roku's platform-agnostic model provides a structural advantage, connecting 85.5 million streaming households and recording 32 billion streaming hours in Q3 2025 [3] - The Roku Channel is the second most popular app on the platform, generating over 1.6 billion streaming hours in Q3 [4] - Roku's diverse revenue model includes home screen advertising, subscription revenue sharing, and device licensing fees, benefiting from a 20% year-over-year increase in streaming hours [5] - The Zacks Consensus Estimate for Roku's 2026 EPS is $1.21, reflecting a 265.6% year-over-year growth [6] Netflix's Position - Netflix operates a content-first model, ending Q3 2025 with over 301.6 million paid subscribers and achieving a TV view share of 8.6% in the U.S. [7] - The 2026 content slate includes returning series and new titles, which are expected to support viewing events [8][9] - Netflix is diversifying its monetization through an advertising-supported tier and gaming initiatives, while also expanding into live sports programming [10] - The Zacks Consensus Estimate for Netflix's 2026 EPS is $3.21, indicating a year-over-year growth of 26.93% [12] Market Performance - Over the past six months, Roku shares have increased by 12.6%, while Netflix shares have decreased by 22.6%, reflecting a preference for Roku's asset-light model [15] - Despite recent share price weakness, Netflix trades at a premium with a forward twelve-month P/E of 7.79x compared to Roku's 3.07x, indicating different market perceptions of their business models [18] Conclusion - Roku's asset-light platform model offers broader exposure to streaming growth and improved monetization, while Netflix's content-heavy approach involves higher capital investment and debt [21] - Currently, Roku appears better positioned on a risk-reward basis, while Netflix may present a more attractive entry point in the future [21]