Say Hello to the Growth Stock That's Winning the Streaming Wars

When investors think about companies within the streaming market, the vast majority probably come up with Netflix first. However, there are other businesses in this evolving industry that also deserve some attention.

For example, one streaming platform just reported revenue of $4.7 billion in 2025. That figure is 161% higher than in 2020, demonstrating robust adoption trends.

Say hello to the growth stock that has a winning position in the streaming wars.

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Finishing off the year on a high note

During the fourth quarter of 2025, Roku (NASDAQ: ROKU) posted revenue that was up 16% year over year. That number came in ahead of Wall Street analyst estimates. The business also registered net income of $88 million for the entire year. This was after Roku reported a cumulative net loss of $839 million in 2023 and 2024.

"Looking ahead to 2026 and beyond, we're confident in our ability to sustain double-digit platform revenue growth while continuing to grow profitability," founder and CEO Anthony Wood said on the Q4 2025 earnings call.

It's also worth noting that Roku produced a record $484 million in free cash flow (FCF) last year. Increasing FCF per share is management's priority.

Performing well in the streaming wars

Roku's advantage in the streaming wars is that it's a neutral platform. It connects content from numerous providers with consumers in 17 countries. It's on track to exceed 100 million streaming households this year, as customers find value in aggregating their subscriptions in one easy-to-use interface.

This means Roku will continue to gain as the whole streaming industry takes viewership from cable TV. It's doing a good job capturing a bigger audience, especially with The Roku Channel, which is the second most popular free, ad-supported streaming app in the U.S. And based on hours streamed, Roku is the top platform in North America.

Consequently, Roku has the scale, data, and integrations to attract ad dollars. This should support years of top-line growth.

Roku is trading significantly below the peak

When its revenue was rising at more than 50% per year, Roku shares hit their peak in July 2021. Today the stock is trading 82% below that all-time high (as of Feb. 23). Market sentiment has clearly weakened considerably, as growth has stabilized.

Investors interested in buying shares can do so at a more compelling valuation. The price-to-sales ratio of 2.7 is a good entry point. Consensus analyst estimates call for earnings per share to increase at a compound annual rate of 84% over the next three years, a tailwind that can lift the stock price.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Roku. The Motley Fool has a disclosure policy.