Roku (ROKU) has just opened 2026 earnings season with Q1 results that build on a clear turnaround in the numbers, capped by Q4 2025 revenue of about US$1.4b and basic EPS of US$0.54. Over the past year, quarterly revenue has moved from US$1,201.0m in Q4 2024 to US$1,394.9m in Q4 2025, while basic EPS shifted from a loss of US$0.24 to a profit of US$0.54. This sets up a story in which improving profitability sits at the center of the earnings debate, with margins in focus as investors weigh how durable this new earnings profile might be.

See our full analysis for Roku.

With the headline figures on the table, the next step is to line these results up against the most common narratives around Roku, highlighting where the numbers support the story and where they raise fresh questions for investors.

TTM earnings swing to US$88.4m profit

• Over the trailing twelve months, Roku moved from a net loss of US$129.4m at Q4 2024 to net income of US$88.4m by Q4 2025, with Basic EPS shifting from a loss of US$0.89 to a profit of US$0.60 over the same window.
• What stands out for the bullish view is that this new profitability lines up with forecast earnings growth of about 25.8% per year, so:
  • Supporters who expect earnings to reach the hundreds of millions over the next few years can point to the step from a US$27.4m loss in Q1 2025 to US$80.5m of net income in Q4 2025 as evidence that the model can already produce profits.
  • At the same time, the move from quarterly Basic EPS of a US$0.19 loss in Q1 2025 to a US$0.54 profit in Q4 2025 is a reminder that forecasts assume this higher earnings base is sustainable, not just a one off uplift.

Bulls argue that ad driven growth, The Roku Channel, and operating leverage could keep pushing margins higher from here, while the recent shift to positive EPS shows what the business can earn when things are working. 🐂 Roku Bull Case

Revenue growth at 10.1% vs market 11.1%

• Revenue over the trailing twelve months reached US$4.7b at Q4 2025 compared with US$4.1b a year earlier, and analysts in the dataset expect future revenue growth of about 10.1% per year versus a cited 11.1% per year for the broader US market.
• Critics in the bearish narrative focus on this slightly slower expected top line pace as a potential cap on the story, because:
  • If revenue grows more slowly than the market while large competitors push their own platforms, the concern is that it becomes harder to sustain the kind of gains in average revenue per user that the bulls are counting on.
  • On the other hand, the recent quarterly revenue path from US$1,020.7m in Q1 2025 to US$1,394.9m in Q4 2025 shows that when product, ads, and engagement line up, Roku has been able to add hundreds of millions of dollars of annualized sales, which bears need to factor into their caution.

Mixed valuation signals at US$123.58 share price

• At a current share price of US$123.58, the provided DCF fair value of about US$194.75 suggests a large upside gap, yet the P/S ratio of 3.8x sits above both the US Entertainment industry average of 1.5x and the peer average of 2.9x.
• The bearish narrative leans on that premium multiple to argue expectations may already be demanding, which creates a clear tension with the inputs that:
  • Show the stock trading about 36.5% below the DCF fair value estimate, which supports the idea that the current price does not fully reflect the modeled future cash flows.
  • Highlight that the higher P/S multiple asks investors to believe the recent shift to US$88.4m of TTM net income and projected 25.8% annual earnings growth will continue long enough to justify paying more sales multiple than industry and peer averages.

Skeptics warn that paying a higher P/S multiple than peers could be risky if revenue growth tracks closer to the 10.1% forecast instead of surprising to the upside, while supporters point to the DCF fair value gap as a reason to keep watching how the story develops. 🐻 Roku Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Roku on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If this mix of optimism and caution has you thinking twice, use it as a prompt to move quickly, check the underlying data yourself, and then pressure test your own thesis against the 3 key rewards

See What Else Is Out There

Roku carries a higher P/S multiple than its industry while revenue growth expectations sit close to the market and depend heavily on sustaining recent profitability.

If that mix of premium pricing and growth questions feels tight, widen your search with the 51 high quality undervalued stocks to quickly spot ideas where expectations and valuation look better aligned.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.