Why Roku Stock Rose Today
Key Points
Roku is winning market share as ad dollars follow eyeballs.
The company's profit margins should continue to expand.
- 10 stocks we like better than Roku ›
Shares of Roku (NASDAQ: ROKU) popped on Friday after the streaming pioneer's third-quarter profits exceeded investors' expectations.
As of 1:35 p.m. ET, Roku's stock price was up more than 6% after rising by over 16% earlier in the day.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: Getty Images.
Market share gains are fueling Roku's growth
Roku's revenue climbed 14% year over year to $1.2 billion. The streaming device maker and digital advertising platform operator is broadening the distribution of its smart TVs and accessories while deepening its relationships with marketers.
Roku continues to gain share in the massive U.S. digital ad market. It formed a partnership with Amazon in June that's enabling advertisers to more accurately and cost-effectively target 80 million connected TV households in the U.S.
Better still, Roku was able to keep a lid on operating expenses. That helped the streaming leader generate positive operating profit for the first time since 2021, to the tune of $9.5 million. Roku's net income, in turn, improved to $0.16 per share from a loss of $0.06 per share in the third quarter of 2024. That easily surpassed Wall Street's estimates, which had called for earnings per share of $0.09.
Streaming growth should propel Roku's profits
Management sees revenue growing by 12% year over year to $1.35 billion in the fourth quarter, aided by political ad spending and Roku's recent purchase of streaming service provider Frndly TV.
Additionally, the long-term shift from traditional TV to streaming services remains firmly intact.
"Looking ahead, we are confident in our ability to deliver double-digit platform revenue growth while increasing operating margins in 2026 and beyond," Roku CEO Anthony Wood and CFO Dan Jedda said in a letter to shareholders.
Should you invest $1,000 in Roku right now?
Before you buy stock in Roku, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Roku wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $587,288!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,243,688!*
Now, it’s worth noting Stock Advisor’s total average return is 1,055% — a market-crushing outperformance compared to 194% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of October 27, 2025
Joe Tenebruso has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Roku. The Motley Fool has a disclosure policy.
Recommended Articles
