Roku, Inc. (ROKU) Stock Analysis
Score BCompounder · Grade D · Bullish
$130.18
$89.76
-31.0%
5/10
D
Compounder
Investment Thesis
Price is above modeled value range. Quality supports holding but not attractive for new positions.
Trading above fair value.
For New Investors
Price above modeled value range
For Current Holders
Quantitative score: neutral
Buy if
- Price drops 15-20% (improves asymmetry)
- Bull scenario catalysts materialize
- Market-wide correction creates opportunity
Sell if
- Bear scenario triggers occur
- Quality metrics deteriorate (ROIC declining)
- Better alternatives emerge
Valuation
Fair Value estimate: $89.76 (-31.0%). Overvalued vs fundamentals.
PEG-Based EPS
$143.85
FCF DCF Model
$80.15
EV/EBITDA
$55.52
Blended Fair Value
$89.76
Confidence
Medium
Methods
PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA
Quality Analysis
53/120 points
Low Quality
ROE (3Y Avg)
-10.8%
ROIC-WACC Spread
-7.9%
D/E Ratio
0.3x
Current Ratio
2.8x
Interest Coverage
-3x
FCF Positive Years
3/3
Quality Flags
- Low ROE: -10.8% (need >12%, got 0/20 pts)
- ROIC spread: -7.9pp (got 0/25 pts)
- Leverage: D/E 0.3x (13/15 pts)
- Interest coverage: -3.0x (0/10 pts)
Market Sentiment
Wall Street Consensus
$149.00
+14.5% Upside
27 analysts
Range: $100.00 — $170.00
Rating: Strong Buy
Our model is more cautious than Wall Street.
Trend & Technical
Price ($130.18) is 27.0% above SMA 200 ($102.49). Bullish trend confirmed.
Tech Score 78/100 — Strong technical setup. Trend, momentum, and positioning aligned bullish.
Risk & Reward
Asymmetry Ratio
10.00:1
Expected Return
+84.0%
Bull Upside
+153.3%
Bear Downside
-10.0%
Excellent asymmetry: >3:1 ratio. Upside significantly outweighs downside.
Verdict: Very Favorable
Scenario Analysis
Bear
Base
Bull
Buy Zone & Action Plan
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AI Executive Summary
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Technical Analysis
RSI, MACD, moving averages, trend signals, and momentum indicators.
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Frequently Asked Questions
What is the fair value of ROKU?
Based on our multi-method conviction analysis, the estimated fair value of Roku, Inc. (ROKU) is $89.76. This is calculated by blending PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA and applying a quality premium of 0% based on the company's fundamentals. The confidence level of this estimate is medium.
Is ROKU a buy, sell, or hold?
ROKU currently has a HOLD rating with a conviction score of 5/10. Price is above modeled value range. Quality supports holding but not attractive for new positions. Price above modeled value range.
Is ROKU a high-quality stock?
Roku, Inc. has a quality grade of D (53/120 points), rated as Low Quality. Key metrics include ROE of -10.8%, ROIC-WACC spread of -7.9%, and D/E ratio of 0.3x.
What type of stock is ROKU?
ROKU is classified as a "compounder" in our framework. High P/E: 96.4x, Low dividend (reinvesting): 0.0%, High beta (cyclical behavior): 2.04, Moderate growth: 12.3%, Compounder growth range: 12.3%
What do Wall Street analysts say about ROKU?
27 Wall Street analysts have a consensus price target of $149.00 for ROKU, representing +14.5% upside. Targets range from $100.00 to $170.00. The consensus recommendation is "Strong Buy". Our model is more cautious than Wall Street.
What are the risks of investing in ROKU?
The risk/reward asymmetry ratio for ROKU is 10.00:1, rated as Very Favorable. Excellent asymmetry: >3:1 ratio. Upside significantly outweighs downside. The expected return is +84.0%, with bull case upside of +153.3% and bear case downside of -10.0%.
What is the current trend for ROKU?
ROKU is in a bullish trend. Price ($130.18) is 27.0% above SMA 200 ($102.49). Bullish trend confirmed. The technical score is 78/100.
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Last updated: May 30, 2026 · Framework version 3.7
This analysis is for informational purposes only and should not be considered financial advice. Always do your own research before making investment decisions.