Roku Stock Soars 10.2% on Positive Free Cash Flow

Roku's stock surged 10.2% in pre-market trading on June 16, 2025, marking a significant uptick in investor sentiment.

Roku has faced challenges in recent years, including a return to losses and intense competition. However, the company has continued to expand its user base and maintain its leadership in North America while venturing into international markets. This growth, coupled with a strategy of using device revenue as a loss leader to attract more viewers, has positioned Roku for potential market-beating returns in the coming year.

Analysts from Citizens JMP have reiterated their Market Outperform rating for Roku, maintaining a $95 price target. This rating reflects the company's potential in the streaming market, despite facing stiff competition from tech giants like Apple, Amazon, and Alphabet. The company's market cap, currently around $12 billion, is significantly smaller than its competitors, which could pose a competitive disadvantage.

Roku's financials show a mixed picture. While the company has reported net losses since the first quarter of 2022, it has also seen positive free cash flow since 2023. In the first quarter of 2025, Roku reported $137 million in free cash flow, a significant increase from the year-ago quarter. This financial stability, along with a valuation that has fallen below S&P 500 averages, suggests that a return to profitability could catalyze a recovery in the stock.