Key insights
- Morgan Stanley raised its price target for Roku to $170, citing strong advertising growth prospects and increased engagement potential. The firm highlighted tailwinds like DSP integration, major sporting events, and political advertising, projecting mid-teens platform revenue growth. With multiple analysts revising earnings upward and the stock appearing slightly undervalued, this positive outlook on a key player in the digital advertising space could signal broader strength in the tech and media sectors.
Investing.com - Morgan Stanley raised its price target on Roku Inc. (NASDAQ:ROKU) to $170 from $150 while maintaining an Overweight rating on the streaming platform company. The stock has delivered a 65.8% return over the past year and currently trades at $122.20, suggesting significant upside to the new target. According to InvestingPro data, seven analysts have recently revised their earnings upwards for the upcoming period, reinforcing the bullish sentiment.
The firm cited the company’s position with more than 100 million households starting their connected TV experience on the Roku home screen. Morgan Stanley expects a more dynamic, interactive and personalized landing page to drive engagement and monetization.
The firm increased its 2027 Platform revenue growth estimate by approximately 200 basis points to solid mid-teens growth. Morgan Stanley identified several tailwinds in 2026 including demand-side platform integration with Amazon and DV360, the World Cup through Fox One premium subscriptions, and political advertising.
Political advertising contributed $90 million in 2024 compared to Morgan Stanley’s estimate of $75 million in 2026. The firm noted that incremental disclosure on Advertising and Subscription segments supports valuation on a sum-of-the-parts basis with approximately 75% of the stock price representing Subscriptions at Spotify and Netflix multiples of around 12 times gross profit.
Morgan Stanley’s $170 base case price target represents the highest on Wall Street at approximately 7 times gross profit or 23-24 times free cash flow. The firm’s bull case stands at $200, representing approximately 30 times $1 billion of free cash flow. InvestingPro analysis indicates the stock appears slightly undervalued at current levels. For investors seeking deeper insights, Roku is among the 1,400+ US equities covered by comprehensive Pro Research Reports, which transform complex Wall Street data into clear, actionable intelligence.
In other recent news, Roku Inc. has launched a redesigned home screen for its streaming platform, marking its first significant update in over a decade. This update will reach over 100 million streaming households and includes features like Quick Access and expanded Top Picks, aimed at enhancing user experience. Additionally, Roku has introduced FOX One as a premium subscription option on The Roku Channel, priced at $19.99 per month, offering access to FOX’s news, entertainment, and sports programming, including all 104 matches of the FIFA World Cup 2026.
Analyst firms have weighed in on these developments, with Citizens reiterating a Market Outperform rating and a $170.00 price target for Roku. The firm highlighted Roku’s reach in over 50% of U.S. broadband households and its capture of 44% of U.S. streaming hours in the fourth quarter of 2025. Citizens also emphasized the potential for improved monetization through the new home screen rollout. Meanwhile, Jefferies reiterated a Buy rating with a $150.00 price target, citing potential upside in fiscal 2026 Platform revenue due to factors like political advertising and World Cup coverage.
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