Roku Inc Class A

ROKU: XNAS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$66.00	Ycrqm	Ycdhftwy

Roku Earnings: An Excellent Quarter Across the Board Keeps Roku on the Right Path

Matthew Dolgin

Aug 2, 2024

Roku’s second quarter was about as encouraging as it could be, in our view. Usership and engagement continued to increase impressively, and the company has now maintained positive free cash flow and adjusted EBITDA since both metrics turned positive in the middle of 2023 for the first time since the pandemic-related boom. However, we think continued performance like this is imperative for Roku to warrant its current market value, and we still expect top-line growth to decelerate long term as the firm continues expanding profitability. We are maintaining our $50 fair value estimate, making the stock slightly overvalued following these excellent results.

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