Roku (ROKU) is poised to exceed its 2026 guidance for high-teens revenue growth, increasing earnings before interest, taxes, depreciation and amortization margin, and rising free cash flow, leading to $1 billion in FCF by 2028, Wedbush said in a note Monday
Roku's accelerating monetization with an underappreciated runway, improving profitability, and a favorable tax position places it on Wedbush's best ideas list, the brokerage added.
Roku is scheduled to release its Q1 financial results after the stock market closes on Thursday.
Wedbush said it expects Roku's Q1 revenue to be $1.205 billion, compared with consensus of $1.204 billion and guidance of $1.2 billion. The brokerage modeled Platform revenue growth of 22% year-over-year to about $1.08 billion, ad revenue to grow 19% to $577 million, subscription revenue to rise 25% to $499 million, and Devices revenue to decline 7% to $130 million.
2026 revenue guidance of $5.5 billion and adjusted EBITDA of $635 million has upside potential from a strong political cycle this year, the brokerage said.
Wedbush believes Roku is best positioned among streamers, even as ad budgets get tighter amid global conflicts and rising gas prices, as it can meet advertisers across the demand curve.
Wedbush maintained an outperform rating on Roku with a price target of $140.
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