Roku gets upgrades from two Wall Street shops after big earnings beat

Roku could be poised for even more upside following its latest quarterly results, according to Pivotal Research and Wells Fargo. The firms upgraded the streaming platform, with Pivotal moving to buy from hold and Wells Fargo now rating it overweight, up from equal weight. They also increased their price targets on Roku. Pivotal nearly doubled its target to $125 from $65 — implying 44% upside from Thursday's close — while Wells Fargo upped its target to $129 from $74, which reflects more than 48% upside potential. The moves come on the back of a stronger-than-expected fourth-quarter report from Roku. Roku posted adjusted EBITDA of $77.5 million and revenue of $1.20 billion. That is well above the $34.7 million in adjusted EBITDA and $1.15 billion in revenue that analysts polled by FactSet were expecting. The company also issued guidance for the current quarter and full year that was in line with expectations. Shares rallied more than 13% in the premarket on Friday. ROKU 1D mountain ROKU, 1-day Even though Roku's first-quarter and full-year forecasts were what analysts were anticipating, Pivotal thinks they are "overly conservative" and that the company's current growth setup might be underappreciated by the market. "While clearly NFLX and SPOT (BUY) are materially better positioned than ROKU the reality is they both have proven out that focus/product and scale can allow one to be successful against dramatically larger competitors and we think ROKU's best-in-class product, a solid '25, already large N. American market share and a successful international expansion set-up ROKU on a path to continued success that does not appear to be properly valued by the market," analyst Jeffrey Wlodarczak wrote in a note to clients. As for Wells Fargo, analyst Steven Cahall sees multiple bullish catalysts, such as inventory growth and home screen innovation with the inclusion of brand ads and video. "ROKU is accelerating as , homescreen and subscription revenues leverage the nearly 100mm Roku CTV households," the analyst wrote in a Thursday note. "Operating leverage is expanding EBITDA margins and generating strong , and ROKU has no debt," Cahall added. On top of that, there could be political tailwinds in store in both 2026 with the midterm elections and 2028 with the presidential election, as Cahall anticipates that campaigns and political action committees will look to reach younger audiences. In 2026 specifically, he estimates the company's political revenues could be more than $200 million, which would mean "a long-term shift in ad share" for the company, he said. However, most analysts on Wall Street are on the sidelines with the name. LSEG data shows that 17 out of the 34 analysts who cover it have a hold rating. Another 14 have a strong buy or buy rating. Additionally, the stock's average target of around $81 implies more than 6% downside ahead. While the stock has outperformed the broader market in this young year, rising nearly 17% year to date, it has underperformed over the past 12 months. During that period, shares have fallen almost 5%, substantially less than the S & P 500's gain of more than 22% over the past year.