JPMorgan has revised its expectations for Roku (ROKU, Financial) ahead of the company's third-quarter earnings report, reflecting recent positive trends. The firm maintained its "overweight" rating and increased the target price from $90 to $92.
Projected platform revenue growth for Roku's third quarter has been adjusted from 9% to 11% year-over-year, surpassing the initial guidance of 9%, due to stable macroeconomic and advertising trends along with political benefits. For the fourth quarter, the revenue growth estimate has been increased from 11% to 12%.
The adjusted EBITDA for Roku is anticipated to be $45 million for the third quarter and $25 million for the fourth quarter. JPMorgan highlighted in a report that despite heightened investor expectations and a 40% rise in Roku's stock price since the second-quarter results, they remain optimistic about Roku's performance. They predict management will reaffirm prospects for accelerated platform revenue in the fourth quarter of 2025 and see significant upside potential in 2025 profit and free cash flow projections.
Year-to-date, Roku's stock has decreased by 16%, whereas the S&P 500 has risen by 21%.
