📊 ROKU Key Takeaways
Is Roku, Inc. (ROKU) a Good Investment?
Roku maintains exceptional financial health with a debt-free balance sheet, $1.6B cash reserves, and strong free cash flow generation of $196M (15.7% margin), supported by solid 15.2% revenue growth. However, operating margins remain critically thin at 4.1% despite healthy 45.2% gross margins, resulting in poor returns on equity (3.2%) and assets (2.0%), indicating the company struggles with capital efficiency and operational leverage despite revenue scale.
Roku’s fundamentals show notable improvement: mid-teens revenue growth, a 43.8% gross margin, and positive net income alongside strong free cash flow despite near-breakeven operating income. A debt-free balance sheet with substantial liquidity provides resilience and capacity to invest. The path to sustained operating profitability is the key lever for further fundamental strength.
Why Buy Roku, Inc. Stock? ROKU Key Strengths
- Debt-free balance sheet with zero long-term debt and 0.00x debt-to-equity ratio provides significant financial flexibility
- Exceptional free cash flow generation of $196M with minimal $3.1M CapEx requirements and 2.91x current ratio shows strong liquidity
- Revenue growth of 15.2% YoY with 166.3% diluted EPS growth demonstrates top-line momentum and earnings leverage
- Debt-free balance sheet with $1.59B cash and strong liquidity (2.75x current ratio)
- Healthy free cash flow ($478M, 10.1% FCF margin) supports self-funding
- Solid revenue growth (+15.2% YoY) with improving profitability (positive net, near-breakeven operating)
ROKU Stock Risks: Roku, Inc. Investment Risks
- Operating margin of 4.1% is critically thin relative to 45.2% gross margin, indicating high operating expenses consume most profitability
- ROE of 3.2% and ROA of 2.0% demonstrate severely inefficient capital deployment despite $4.4B in total assets
- Operational leverage is poor despite $1.2B revenue scale, suggesting business model faces structural cost pressures or limited pricing power
- Operating profitability remains fragile (slightly negative operating income, negative interest coverage)
- Ad market cyclicality and competitive pressure could compress margins and growth
- Low ROE/ROA indicate modest returns on capital until margins expand
Key Metrics to Watch
- Operating margin expansion trajectory - critical to improving shareholder returns
- Operating expense ratio trend - need clarity on whether company can control SG&A and R&D as percentage of revenue
- Free cash flow sustainability and conversion rate - validates whether strong FCF continues as business scales
- Operating margin
- Free cash flow margin
Roku, Inc. (ROKU) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 2.91x current ratio provides a solid financial cushion.
ROKU Profit Margin, ROE & Profitability Analysis
ROKU vs Telecom Sector: How Roku, Inc. Compares
How Roku, Inc. compares to Telecom sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Roku, Inc. Stock Overvalued? ROKU Valuation Analysis 2026
Based on fundamental analysis, Roku, Inc. has mixed fundamental signals relative to the Telecom sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Roku, Inc. Balance Sheet: ROKU Debt, Cash & Liquidity
ROKU Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Roku, Inc.'s revenue has grown significantly by 71% over the 5-year period, indicating strong business expansion. The most recent EPS of $-5.01 indicates the company is currently unprofitable.
ROKU Revenue Growth, EPS Growth & YoY Performance
ROKU Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $1.0B | -$27.4M | $-0.19 |
| Q3 2025 | $1.1B | $7.9M | $0.05 |
| Q2 2025 | $968.2M | $10.5M | $0.07 |
| Q1 2025 | $881.5M | -$27.4M | $-0.19 |
| Q3 2024 | $912.0M | -$9.0M | $-0.06 |
| Q2 2024 | $847.2M | -$34.0M | $-0.24 |
| Q1 2024 | $741.0M | -$50.9M | $-0.35 |
| Q3 2023 | $761.4M | -$122.2M | $-0.88 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Roku, Inc. Dividends, Buybacks & Capital Allocation
ROKU SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Roku, Inc. (CIK: 0001428439)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ROKU
What is the AI rating for ROKU?
Roku, Inc. (ROKU) has a Combined AI Rating of BUY from Claude (HOLD) and ChatGPT (BUY) with 74% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ROKU's key strengths?
Claude: Debt-free balance sheet with zero long-term debt and 0.00x debt-to-equity ratio provides significant financial flexibility. Exceptional free cash flow generation of $196M with minimal $3.1M CapEx requirements and 2.91x current ratio shows strong liquidity. ChatGPT: Debt-free balance sheet with $1.59B cash and strong liquidity (2.75x current ratio). Healthy free cash flow ($478M, 10.1% FCF margin) supports self-funding.
What are the risks of investing in ROKU?
Claude: Operating margin of 4.1% is critically thin relative to 45.2% gross margin, indicating high operating expenses consume most profitability. ROE of 3.2% and ROA of 2.0% demonstrate severely inefficient capital deployment despite $4.4B in total assets. ChatGPT: Operating profitability remains fragile (slightly negative operating income, negative interest coverage). Ad market cyclicality and competitive pressure could compress margins and growth.
What is ROKU's revenue and growth?
Roku, Inc. reported revenue of $1.2B.
Does ROKU pay dividends?
Roku, Inc. does not currently pay dividends.
Where can I find ROKU SEC filings?
Official SEC filings for Roku, Inc. (CIK: 0001428439) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ROKU's EPS?
Roku, Inc. has a diluted EPS of $0.57.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is ROKU a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Roku, Inc. has a BUY rating with 74% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is ROKU stock overvalued or undervalued?
Valuation metrics for ROKU: ROE of 3.2% (sector avg: 15%), net margin of 6.9% (sector avg: 14%). Compare these metrics with sector averages to assess valuation.
Should I buy ROKU stock in 2026?
Our dual AI analysis gives Roku, Inc. a combined BUY rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is ROKU's free cash flow?
Roku, Inc.'s operating cash flow is $199.1M, with capital expenditures of $3.1M. FCF margin is 15.7%.
How does ROKU compare to other Telecom stocks?
Vs Telecom sector averages: Net margin 6.9% (avg: 14%), ROE 3.2% (avg: 15%), current ratio 2.91 (avg: 1).