Streaming television platform Roku (NASDAQ: ROKU) is set to announce its earnings this Thursday after the market closes, with investors keen to assess the company’s financial outlook. In the last quarter, Roku successfully met analysts’ revenue expectations, recording $1.21 billion in revenue, reflecting a 14% year-over-year increase. The company has been on a strong trajectory, with its EBITDA guidance for the upcoming quarter surpassing analysts’ predictions, alongside a full-year EBITDA forecast that also exceeds expectations. Roku notably reported 36.5 billion monthly active users, up 14.1% from the previous year.
For this quarter, analysts anticipate Roku’s revenue to rise by 12.8% year-on-year to reach $1.35 billion, which represents a slowdown compared to the 22% growth reported in the same quarter last year. Adjusted earnings are projected to come in at $0.29 per share. Many analysts have maintained their estimates over the past month, indicating a consensus that Roku can maintain its performance heading into the earnings report. Historically, Roku has a track record of exceeding Wall Street forecasts, having outperformed revenue estimates in every quarter over the past two years by an average of 3%.
An examination of Roku’s competitors within the consumer subscription space provides further context. For instance, Coursera announced a year-on-year revenue growth of 9.9%, exceeding analyst expectations by 2.7%, while Udemy experienced a 3% revenue decline, consistent with consensus estimates. Following their respective earnings reports, Coursera’s shares dipped by 1.2%, while Udemy’s stock remained steady.
The broader outlook for 2025 appears murky due to potential trade policy shifts and discussions surrounding corporate tax alterations, which may influence business confidence and growth prospects. The average share prices of consumer subscription stocks have decreased by 17.3% in the last month; Roku’s shares have experienced a similar decline of 17.4%, now trading significantly below the average analyst price target of $123.08, compared to its current price of $91.20.
As the market awaits Roku’s earnings report, the company’s potential for growth remains in focus. Amid fluctuating market conditions, Roku’s strategic positioning within the streaming sector and its ability to adapt to changing consumer behaviors could be pivotal for its performance moving forward.