Roku saw a significant 7% increase in its share price over the past week, paralleling broader market gains. This surge coincided with Roku's announcement of a new device lineup, including the compact Roku Streaming Stick and Stick Plus, enhanced software features, and geographic expansions into markets like Canada, Mexico, and the UK. These developments likely bolstered investor optimism. At the same time, the broader tech market experienced strong performances led by chipmakers, contributing to overall sector gains. The market itself rose by 2.3%, driven by positive earnings reports and anticipation of potential tariff adjustments.

Buy, Hold or Sell Roku? View our complete analysis and fair value estimate and you decide.

The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 24 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement.

The recent introduction of Roku's enhanced device lineup and its expansion into new markets such as Canada, Mexico, and the UK can potentially invigorate the growth narrative for the company. By making its platforms more accessible and appealing, Roku aims to leverage its home screen and ad partnerships for revenue growth. This move aligns with analysts' expectations of an 11.5% annual revenue increase over the next three years. Despite the upbeat news, Roku's stock has seen a decline of 0.37% over the last year in total shareholder returns, lagging behind the broader US market's 5.9% return.

Roku's shares currently trade at US$59.17, which is 38.3% below the consensus analyst price target of US$95.90. This discount implies optimism for future performance based on the new strategic initiatives. With revenue forecasts suggesting a growth to $5.7 billion by 2028, the recent product announcements and geographic expansion could support these optimistic revenue projections. However, competitive pressures and potential risks, like Walmart's acquisition of VIZIO, could also influence these expectations. The current share price movement, while reflecting recent operational updates, continues to trail behind both the industry average and the US entertainment sector's 40.3% 1-year performance, highlighting the challenges Roku faces in achieving growth targets amid market competition.

Explore historical data to track Roku's performance over time in our past results report.

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.

Companies discussed in this article include NasdaqGS:ROKU.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com